Mastering the Option Chain A Comprehensive Guide to Trading Decisions and Market Analysis

cc. Now what do we have to see? First read above, here we have O Aa. If we go upwards from here, see this, we see O AA, change in O AA, volume, IV, LTP, change, bid volume, bid ask, ask volume, strike, all this is for the call side and the same happens for the put side, so on this side on my left hand side and on your right hand side you can see the calls here, so all these calls are being talked about here and what is being talked about here, about the puts, about the puts, now look here there are many things, this is our strike, we go from the money, you know by now that the white area is out of the money today because this is the expiry, all the strikes that stay here on the white side will all go to zero, okay now see a surprising thing which you have not seen on other days, here if you see the premium around ₹ 1 Also less than 0.65 paise 50 paise 55 paise this premium is over we are almost on the way to zero things but we will start from the very beginning what does O to O mean I don’t know no problem O means open interest okay now what does open interest mean if today I go and sell one lot at this strike let’s say 23500 I will sell one lot one lot Nifty comes in 25 quantity so if I go and sell 25 quantity then let me show you here how much is the margin for 25 quantity okay if I go and sell any lot here then the cost of selling one lot of Nifty here will be 67000 okay okay now if you see here, this is a put, similarly if I call it, then selling the call option will also cost you around 55000. Now here, look at the quantity, okay, I am coming back to the option chain, look at the quantity of the lot. 5 53000. 5 53000. If I go to sell this quantity, Vibhu, if I go to sell this quantity, it will cost this much money, how much rupees 3609 crores 3600 crores on one strike, who has sold? Sellers sold, sellers sold, okay, if sellers have sold this strike by putting 3600 crores, then they do not want to take a loss, yes, okay, because you know there can be unlimited loss in selling, but now if we zoom in carefully, see, now even if the market closes here, they will get Rs 35 crores here also, okay, okay, and what is the maximum they will get? Around 50 crores, we are saying it will cost 3600 crores. How much money do they want to make? 50 crores is such a big risk. So what happens is when they get scared, they cut their position. This is a small loss. So as the market will rise, they will cut their position. Whenever they close their position, option buying should be done right here. So by looking at the option chain, we can also understand when to buy an option. When to sell an option. This is very important. By analyzing the current situation, if I tell you that look, Nifty is running right now, I can see O here. O is also visible in your demat account. Here it is. Looking at this OI, I am clearly saying that you should not buy at all right now. Buyers will suffer losses. I will give you the answer right now. Why will this happen? The day will come when we will get zero hero trades. Sellers will be running with their tails between their legs. We have to run after them. Sellers will run. They will close their positions. Due to closing, the market runs even more.