What is Option Chain? Complete Analysis With Example Meaning with ex

In order to analyse the option chain data, first you need to know basics steps involved. Let us go step by step to know where we can find the option chain list. Convert this list of records to table by clicking the button Into Table at the top right corner. After all the columns are expanded you can load the data to the Excel sheet by clicking Close & Load button at the top right corner.

• Some of these stocks may even go through periods of f&O bans, which may reduce the list of tradeable options stocks.
• Our team of experts specialize in these areas to provide the best learning experience for data enthusiasts of all levels.
• The Yellow quadrant data is for In the Money contracts and the White quadrant data is for Out of the Money contracts.
• In other words, OI is the total of all the buys or all of the sells, not both.

Whereas in buying option you need to have 1.5 time of total premium value. In case you start using more complex strategies, moneyness becomes even more important. Another example,May be a strategy might involve nse option chart buying in the money contracts and then writing out of the money contracts on the same underlying security. In other words, the premium for the option also comes into play in determining profitability.

What is Option Chain Analysis?

Each option contract has its own symbol, just like the underlying stock does. Options contracts on the same stock with different expiry dates have different options symbols. The key features of the options chart that is used for building the strategy are Change in price, Open interest, Change in open interest, and Volume.

Before diving into analyzing the data, you need to understand the strategy for this analysis. There are at least 100 different strategies based on which traders analyze the data. I will focus here on few commonly used strategies that will help you understand the market trend. In simple terms, implied volatility(IV) is the opinion of the market on the stock or index’s next potential move. If the implied volatility is high, the market thinks the security has potential for large price swings in both(up/down) direction. Where as low IV implies the stock will not move as much upon option expiration.

Extracting and Analyzing Live Stock Data in Excel

It provides valuable insights into market sentiment and helps identify potential trading opportunities. By examining strike prices, expiration dates, and premiums, traders can evaluate risk/reward ratios and make informed decisions. IV give you a sense for how volatile the market may be in the future, it can also help you determine the likelihood of a stock reaching a specific price by a certain time.

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. Once the contract expires, a new contract for the next month is generated. As a buyer or seller, you can hold the contract till the expiry. Thereafter if you don’t buy or sell then the contract expires, and you will lose the premium amount.

NSE Options stocks starting from P

Put option contract – is a contract that gives the buyer the right but not the obligation to sell an asset. A premium amount must be paid to the seller for booking the asset. For example, say the strike price for a contract is Rs.200 when the buyer booked it for a premium of Rs.20.

A high number of open interest means that investors are interested in that stock for that particular strike price and expiration date. The option chain allows the trader to evaluate the liquidity and depth of each specific strike. It does not only capture the executed price but also captures real time bid price, ask price, bid quantity and ask quantity. The option chain matrix analysis is most useful for the next trading day so people need to copy / paste this data all the time which is a difficult and time consuming task. Normally every option contract expires on the last Thursday of every month.

Download Excel File (Automated NSE Option Chain Data Extractor)

Premium – is the amount paid to book a call or put option contract. 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.