How to read an option chain
Updated 11 October 2026
An option chain is a table that lists every call and put option for one underlying and one expiry. NSE and BSE publish them, and most trading apps show the same data. At first it looks like a wall of numbers. Once you know what each column means, it becomes a quick snapshot of where traders hold positions and how options are priced.
The layout
The strike price column runs down the middle. Calls are on the left, puts on the right. Each row is one strike, and each side shows the same set of columns for that strike. You choose the expiry at the top.
A small made-up option chain
Below is a simplified chain for Stock ABC, trading at ₹1,003. All numbers are invented for teaching. OI is shown in shares.
| Call OI | Call chg OI | Call IV | Call LTP | Strike | Put LTP | Put IV | Put chg OI | Put OI |
|---|---|---|---|---|---|---|---|---|
| 1,20,000 | +10,000 | 16.8 | 46.40 (ITM) | 960 | 3.10 | 17.9 | +50,000 | 3,00,000 |
| 2,40,000 | +30,000 | 16.1 | 31.20 (ITM) | 980 | 7.40 | 17.0 | +80,000 | 4,20,000 |
| 4,80,000 | +60,000 | 15.6 | 17.80 | 1000 (ATM) | 14.20 | 16.0 | +90,000 | 5,40,000 |
| 6,00,000 | +1,20,000 | 15.2 | 8.60 | 1020 | 25.90 (ITM) | 15.4 | −20,000 | 1,80,000 |
| 3,60,000 | +40,000 | 15.0 | 3.40 | 1040 | 41.30 (ITM) | 15.1 | −10,000 | 60,000 |
What each column means
Open interest (OI)
OI is the number of contracts (or shares) that are open and not yet closed or expired. When a new buyer and a new seller trade, OI goes up. When both close existing positions, it goes down. High OI at a strike means many open positions there, nothing more. It does not tell you who is right.
Change in OI
This is how much OI rose or fell during the day. In the table, the 1020 call added 1,20,000 in OI, more than any other strike. Some traders read a big build-up in call OI as sellers writing calls at that strike, but every contract has a buyer and a seller, so the reading is always a guess about intent.
Volume
Volume counts contracts traded today, whether opening or closing. A strike can show high volume and flat OI if positions were simply passed from one trader to another. Low volume often means wide spreads and harder exits.
IV (implied volatility)
IV is the volatility the market is "pricing in", worked back from the option's price using a pricing model. Higher IV means a more expensive option for the same strike and time. IV often rises before known events and falls after them. Notice that put IV in the table is a little higher at lower strikes; this tilt is called skew.
LTP, bid and ask
LTP is the last traded price. The bid is the best price a buyer is offering right now, and the ask is the best price a seller wants. The gap is the spread. In a thinly traded strike, LTP can be stale, and the real price you get is closer to the bid (when selling) or the ask (when buying).
ITM, ATM and OTM
Most apps shade in-the-money cells in a different colour. In plain words:
- ATM (at the money): the strike closest to the current price, here 1000.
- ITM calls: strikes below the price (960, 980). The 980 call has ₹1,003 − ₹980 = ₹23 of intrinsic value; its LTP of ₹31.20 includes ₹8.20 of time value.
- ITM puts: strikes above the price (1020, 1040). The 1020 put has ₹1,020 − ₹1,003 = ₹17 of intrinsic value; at ₹25.90 it carries ₹8.90 of time value.
- OTM: everything else. These options are made of time value only and lose it as expiry nears.
Worked example: PCR
The put-call ratio (PCR) compares total put OI with total call OI for an expiry.
- Total call OI = 1,20,000 + 2,40,000 + 4,80,000 + 6,00,000 + 3,60,000 = 18,00,000
- Total put OI = 3,00,000 + 4,20,000 + 5,40,000 + 1,80,000 + 60,000 = 15,00,000
- PCR = 15,00,000 ÷ 18,00,000 = 0.83
A PCR below 1 means more call OI than put OI. People read this in opposite ways: some call a low PCR bearish because many calls are being written, others call it bullish because many calls are being bought. That disagreement is the honest point. PCR is a description of positions, not a signal on its own.
Turning the chain into a payoff
The chain gives you prices. To see what a trade could make or lose at expiry, plug a strike and premium into the option payoff calculator. For example, buying the 1020 call at ₹8.60 breaks even at expiry only if the stock is above ₹1,028.60. Below ₹1,020 the whole premium is lost. To understand why premiums move before expiry, read option Greeks, and check contract sizes in lot size.
Risk reminder
Reading the chain well does not change the base odds. SEBI studies (2023 and 2025) found about 9 in 10 individual F&O traders lost money in the years studied (SEBI). Use the chain to understand prices and risk, not as a list of tips.
Questions people ask
- What does high OI at a strike mean?
- It means many contracts are open at that strike. Every open contract has a buyer and a seller, so high OI alone does not say which side will be right.
- What is a good PCR?
- There is no good or bad PCR. It compares put and call open interest, and traders interpret the same number in opposite ways.
- Why is LTP different from the price I get?
- LTP is the last trade, which may be old. Your order fills against the current bid or ask, and the spread can be wide in illiquid strikes.
- Where can I see an official option chain?
- NSE and BSE publish option chains on their websites for every derivative they list.