What it means
For each strike it shows the premium, the volume traded and the open interest. Traders scan it to see which strikes are most active and where large positions sit. Strikes with very high open interest are often read as levels the market may struggle to cross before expiry.
In practice
The option chain is the main screen for options traders. It shows at a glance what the market is paying for each strike, which strikes are liquid enough to trade, and how positions are spread above and below the current price.
Many traders use it to find the strikes with the heaviest call and put positions and treat them as the likely upper and lower bounds for the period until expiry.
What to watch for
The picture changes through the day as positions are opened and closed, so levels read from it in the morning can be gone by the afternoon. Strikes far from the price often show wide spreads and little real trading.
Related terms
4 terms- OptionA contract giving the right, but not the obligation, to buy (call) or sell (put) at a set price before a set date.
- Open interestOIThe number of futures or options contracts that are open and not yet closed or settled.
- Put-call ratioPCROpen interest (or volume) in put options divided by that in call options, used as a rough gauge of market mood.
- CE and PEThe labels for call options (CE) and put options (PE) on Indian exchanges; the E stands for European.