Option Chain Analysis: The CT Scan of Derivative Market by Rajiv L B Roy

The data is in JSON format that has to be parsed from the NSE website. I will be explaining the process for this in the next part of this article along with different types of technical analysis. Expiry Date – is the date at which the option contract expires. Normally every option contract expires on the last Thursday of every month. Based on expiry, the option contract is categorized into 3 groups, Running option contract , Middle option contract , Far option contract . For example, if for a contract the nearest expiry is last Thursday of March, then mid expiry will be last Thursday of April, and far expiry will be last Thursday of May.

book on option chain analysis

It thoroughly explains the complex options investing topics in a very simple way. It also discusses how you can construct various classic options strategies and how these options work despite market movements. It covers hordes of business-tested tactics and proven techniques you can employ while investing in innovative and fresh options products. The author has provided many examples and exhibits that help you understand the power of each strategy.

These orders will be placed on the put/call option that is selected in the table above. INVESTMENT BANKING RESOURCESLearn the foundation of Investment banking, financial modeling, valuations and more. This guide will take a leaf from the pros and radically change the entire philosophy toward building a robust and high-yielding portfolio.


Along with the above-mentioned details, you can also find real-time bid prices live, ask prices and the quantity of the bid and ask. To find that check the spot price and select the strike price near the spot price. CHNG IN OI – is the change in OI within the expiration period. It indicates the number of contracts that are closed or exercised.

At the end of this article, you will understand the following pointersin detail which are related to Option Chain Analysis. Very good book in-depth explanation for the newbies to understand and absorb technicalities of Indian option market, wonderful work . Options on ETFs allow investors to gain exposure to the performance of an index, hedge against a decline in assets, enhance portfolio returns, and/or profit from the rise or fall of a leveraged ETF. NYSE Arca Options and NYSE American Options are the next NYSE markets to migrate to NYSE Pillar, with NYSE Arca Options planned for July 2022. Provided no consent may be required in case the same is being shared as per compliance guidelines or as required by regulators.

book on option chain analysis

Once the data is loaded you will learn various strategies to analyze this data and predict trends. Stock data analysis is one of the most endearing and exhaustive topics. Endearing because who does not want to earn profits in the stock market. Exhaustive because the length and breadth of this topic are infinite. You can easily get lost and overwhelmed with the amount of information that bounces at you when you explore this topic. So in this article, I will be focusing on one particular type of stock analysis i.e Options Chain analysis using Excel.


By looking at volume and OI, traders can check for liquidity. Post market analysis – Draw 4 magical lines before trade. (Selling Puts not really advisable as it will be expensive, Risky & limited profit) so rather stick to Buy ITM calls only. A deep study of Options Chain can provide with a lot of insights on an Option and help you make an informed decision on your trade. So master reading an Options chain to make better trading decisions. Buy and sell orders can be placed directly from the option table by clicking on the Buy/Sell buttons that are next to each Put/Call pair.

With attention to above points, now we will learn how we can analyse option chain and use it in our trading. However its important to understand basics of the main components in option chain. As a matter of fact learning them does not require to be technical in any sense. It makes them aware of the volatility the Nifty 50 options contracts may face.

Call option contract – is a contract that gives the buyer the right but not the obligation to buy an asset. For example, say the strike price for a contract is Rs.150 when the buyer booked book on option chain analysis it for a premium of Rs.20. Now, after one month if the price of the asset increases to Rs.200, then the buyer can go ahead and buy and book a profit of Rs.30 after deducting the premium.

book on option chain analysis

An options chain is a listing of all available options contracts for a given index/stock. It shows all listed puts, calls, their expiration, strike prices, and volume for a single underlying asset within a given maturity period. The option chain is categorized by expiration date and segmented by calls and puts. Here is a screenshot of a portion of the option chain for Nifty taken from the NSE website. This book has long been read by options market professionals and has been called the “bible” by options traders.

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#11 – Options Volatility and Pricing

It is one of the three major types of foreign investment in India; the other two are Foreign Portfolio Investment and Foreign Institutional Investment . Can you please post any link or material where I can study option chain in detail. Welcome to eazeetraders.com, If you would like to know anything and everything about Stock Market and Investment, You are at the right place.

The trading avenues discussed, or views expressed may not be suitable for all investors/traders. A put option gives a trader the right to sell an underlying stock at a certain price up to a certain date. Conversely, a call option gives a trader the right to buy an underlying stock at a certain price before the option’s expiry date. In simple words, an option chain is the listing of all option trading contracts. It comprises puts as well as calls for a particular security. Another term used to describe the listing is Option Matrix.

This book on Options Trading is geared specifically toward women, describing and encouraging them to be successful options traders despite holding a full-time job or being full-time homemakers. It offers a step-by-step guide in an easy-to-understand language for beginners and advanced investors. The primary focus is on executing trades online and communicating what is required to know for being a successful trader. You might be thinking What is the purpose to know all this terms. As a matter of fact Even if you are just using very simple strategies like taking a single position, you still need to consider moneyness. Understand this every options trading strategy requires knowing what moneyness state the options you are buying or selling .

  • You can opt for technical analysis using line and bar graphs.
  • It was known to be controversial since it was e-mailed to Wall Street and printed to the outer world.
  • In a crunch market scenario, these Option Greeks need to be taken advantage of, and at times, it is the trading pulse that can decide the future course of the investment.
  • It is another indicator of traders interest in a particular strike price of an Option.
  • It covers hordes of business-tested tactics and proven techniques you can employ while investing in innovative and fresh options products.

Unique identifiers are collected from Web Site visitors to verify the user’s identity. It will skilfully highlight how trading strategies can be used to gain profits from aspects such as Volatility, Time Decay, or changes in interest rate. It also uses New Charts and examples with discussions on how the proper application of these Greeks can lead to the accuracy of pricing and trading while offering alerts to a range of other opportunities. Open interest equals the total number of contracts, not the total of each transaction by every buyer and seller. In other words, OI is the total of all the buys or all of the sells, not both.


Green includes all the calls and put options data available. In orange box different strike price, and in black box net change . A Bank Nifty Option Chain or also referred to as an options matrix is the live data in the table format representing the intraday call and put option contracts transactions. Every column and row in the table has its own significance. Now the chart is ready to be presented as a report for trend analysis in Options trading. You can make this chart dynamic by connecting it to live data.

Similarly, if both are falling, it signals a bearish move. In fact you should encourage newbies to learn stock market. Implied VolatilityImplied Volatility refers to the metric that is used in order to know the likelihood of the changes in the prices of the given security as per the point of view of the market. It is calculated by putting the market price of the option in the Black-Scholes model. It is a comprehensive book about options trading, which can serve as a good reference book. This comprehensive book explains different concepts and applications of the available options strategies.

Options are financial derivatives that give the buyer the right to buy or sell the underlying asset at a stated price within a specified period. Equity options, which are the most common type of equity derivative, give an investor the right https://1investing.in/ but not the obligation to buy or sell a call or put at a set strike price prior to the contract’s expiry date. Options Trading refers to a scenario when the trader can buy or sell the stocks within a specific period & at a specific rate.

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