An option chain is a single table that lists every available call and put option for one underlying — like the Nifty or a stock — organised by strike price and expiry. It shows the price and activity of each contract side by side, so you can see at a glance where traders are placing their money. It’s the master screen of options trading: reading it well is the foundation of almost every signal, strategy and decision that follows. This guide walks through exactly how it’s laid out and how to read each part.
What is an option chain?
At its simplest, an option chain (also called an option matrix) answers one question: for a given underlying and expiry, what does every strike look like right now? Each row is one strike price. On that row you get the call option on one side and the put option on the other, each with its own price and trading data.
Because it collects everything in one place, the chain is where you read demand, sentiment and the market’s expected range — none of which a plain price chart can show you. A price chart tells you where the underlying has been; the option chain tells you where large participants expect it to go and how much they’re paying to bet on it. On StockMojo you can open the live Nifty option chain and follow along as we break down each section below.
How is the option chain laid out — calls, puts and strikes?
The standard Indian layout is symmetrical around the strikes:
- Calls on the left. The left half of the table is entirely call options — the contracts that gain value when the underlying rises.
- Strikes down the middle. The centre column lists the strike prices in order, low at the top to high at the bottom. This column is shared by both sides.
- Puts on the right. The right half is put options — the contracts that gain value when the underlying falls.
So a single row shows you the call and the put for one strike together. Both sides repeat the same set of columns (LTP, OI, change in OI, volume, IV and so on), mirrored around the centre. Once you internalise “left = calls, right = puts, middle = strikes,” the whole table stops looking crowded and starts reading like a map.
What does each column in the option chain mean?
Every column on the chain answers a specific question. Here are the ones that matter most, from most-used to supporting:
- LTP (Last Traded Price). The premium the option last traded at — its live market price. This is what you’d roughly pay (for a buy) or receive (for a sell) per unit right now.
- OI (Open Interest). The number of contracts still open at that strike — positions that haven’t been closed or expired. Unlike volume, OI carries over from day to day, so it reflects accumulated commitment. This is the single most important column on the chain.
- Change in OI. How much the OI has moved since the previous close. Positive means fresh positions were added at that strike; negative means positions were closed. It shows what’s happening today, which is why intraday traders watch it closely.
- Volume. The number of contracts traded during the current session. It resets to zero each morning. High volume means the strike is liquid — tighter bid–ask spreads and easier entry and exit.
- IV (Implied Volatility). The market’s expected movement priced into that strike. Higher IV = a richer, pricier premium; lower IV = a cheaper one. IV usually varies across strikes, and that pattern (the skew) is a signal in its own right.
- Bid–Ask. The best available buy price (bid) and sell price (ask). A narrow gap between them means good liquidity; a wide gap warns of slippage on entry or exit.
Advanced chains add the option Greeks (Delta, Theta, Gamma, Vega), which measure the option’s sensitivity to price, time and volatility — useful once the basics above are second nature.
What does open interest concentration tell you?
This is where the chain becomes genuinely predictive. OI is not spread evenly across strikes — it clusters, and those clusters mark levels the market is defending. Think of them as walls:
- Highest call OI above the price = resistance. A big pile of open call contracts above the current price marks a level the market expects to hold as a ceiling. The writers who sold those calls have an interest in the underlying staying below it.
- Highest put OI below the price = support. A big pile of open put contracts below the current price marks an expected floor, for the mirror reason.
The zone between the biggest put-OI wall (support) and the biggest call-OI wall (resistance) is, in effect, the market’s expected trading range until expiry. When you also watch change in OI, you see the walls being built or dismantled in real time — put OI falling at a support strike is an early warning that the floor is weakening. For a deeper treatment of how these positions form and shift, see our guide to open interest in options, or open the open interest tool to see the concentrations live.
What do ITM, ATM and OTM mean on the chain?
These labels describe where each strike sits relative to the current price, and the chain usually colour-codes them so the two halves are easy to separate:
- ATM (At-The-Money). The strike closest to the current underlying price — your reference point. ATM options hold the most time value and react the most to movement, so OI and volume tend to be densest here.
- ITM (In-The-Money). Options that already have intrinsic value. For calls, that’s every strike below the current price; for puts, every strike above it.
- OTM (Out-Of-The-Money). Options with no intrinsic value yet — only time value. For calls, strikes above the price; for puts, strikes below.
Notice the mirror: a strike that is ITM for calls is OTM for puts, and vice versa. That’s why the same centre strike shows an expensive call and a cheap put on one row, and the reverse a few rows down.
Reading a chain excerpt: a worked illustration
Here’s a three-strike slice to tie the columns together. The numbers are illustrative only — chosen to be internally consistent, not to reflect any live quote. Assume the underlying is trading near 25,000, so 25,000 is the ATM strike:
| Call OI | Call LTP | Strike | Put LTP | Put OI |
|---|---|---|---|---|
| 30 | 180 | 24,900 (call ITM / put OTM) | 70 | 85 |
| 55 | 120 | 25,000 (ATM) | 115 | 60 |
| 90 | 75 | 25,100 (call OTM / put ITM) | 175 | 40 |
Read it row by row. At 24,900, the call is ITM (its ₹180 premium includes ₹100 of intrinsic value plus ₹80 of time value), while the put is OTM at ₹70 — and put OI is heaviest here (85), marking this as the support wall. At 25,000 (ATM), call and put premiums are close and almost entirely time value. At 25,100, the call is now OTM and cheap (₹75), the put is ITM (₹175 = ₹100 intrinsic + ₹75 time value), and call OI is heaviest (90) — the resistance wall. So this little slice already tells you the expected range: support near 24,900, resistance near 25,100.
How do PCR and max pain come from the chain?
A key point that trips up beginners: PCR and max pain are not separate data feeds — they are calculations derived from the OI column you’re already reading.
- PCR (Put-Call Ratio) divides total put OI by total call OI across the chain. A reading above 1 means more puts are open than calls (a bullish lean, as put writers expect support to hold); below ~0.7 leans bearish. It’s a one-number summary of the OI picture — explore it on the PCR tool.
- Max pain is the strike at which option buyers, collectively, would lose the most (and writers pay out the least) if the underlying settled there. It’s found by summing the intrinsic-value payout across every strike and picking the minimum. Because writers hedge their books, price often drifts toward this level near expiry — though strong trends and news can override it entirely. See max pain theory for the mechanics, or the live max pain tool.
Both are shortcuts. Once you can read OI yourself, PCR and max pain become confirmations of what the chain is already telling you rather than mysteries.
How do you read the option chain in 60 seconds?
You don’t need to study every cell. Here’s a fast routine that captures most of the value:
- Find the ATM strike. It anchors everything — calls below, puts above.
- Spot the walls. Note the strike with the biggest call OI above the price (resistance) and the biggest put OI below it (support). That’s your expected range.
- Check change in OI. Where is fresh OI being added today, and where is it falling? Rising put OI at support strengthens the floor; falling call OI at resistance hints the ceiling may break.
- Glance at IV. Is IV high or low versus its recent range? High IV means premiums are rich (favours selling); low IV means they’re cheap (favours buying). Our implied volatility guide covers how to judge this.
- Confirm with PCR / max pain. Do the summary numbers agree with the walls you found? Alignment is a stronger signal.
Run through those five steps and you have a complete framework — expected range, today’s momentum, and whether options are cheap or expensive — in about a minute.
Key terms
- Strike price — the fixed price at which an option can be exercised; each row of the chain is one strike.
- Open interest (OI) — the number of contracts still open at a strike; the chain’s most important column.
- LTP — the last traded premium of an option, its live market price.
- Implied volatility (IV) — the expected movement priced into an option; higher IV means a costlier premium.
- ATM / ITM / OTM — a strike’s position relative to the current price: at, in, or out of the money.
- PCR — put OI divided by call OI, a one-number read of chain sentiment.
- Max pain — the strike where option buyers collectively lose the most, derived from the OI column.