Options glossary
Plain-English answers to option chain questions for Indian traders: what AOC is, LTP, open interest, OI change, PCR, max pain, IV, Greeks, time value, support and resistance and backtesting.
AOC (Advance Option Chain)
In Indian options trading, AOC stands for Advance Option Chain, an option chain analysis tool for NSE, BSE, MCX and crypto that turns raw open interest, OI change and volume into support, resistance and reversal levels.
Option Chain
An option chain is a table of all the call (CE) and put (PE) options available for one underlying, such as NIFTY or a stock, and one expiry, arranged by strike price.
How to Analyse an Option Chain
To analyse an option chain, find the call strike with the highest open interest above the spot price (resistance) and the put strike with the highest open interest below it (support), then check today's OI change to see whether writers are adding to those levels or moving them.
LTP (Last Traded Price)
LTP stands for last traded price, the price at which the most recent trade in a contract went through.
Option Premium
An option premium is the price of an option contract, and it equals intrinsic value plus time value.
Put-Call Ratio (PCR)
The put-call ratio (PCR) is the total open interest of put options divided by the total open interest of call options for the same underlying and expiry.
Max Pain
Max pain is the strike price at which the total value of all open call and put options would be lowest at expiry, which is the price where option buyers as a group would lose the most.
Open Interest (OI)
Open interest (OI) is the total number of derivative contracts, such as options or futures, that are open at a point in time and have not yet been squared off, exercised or expired.
Change in Open Interest (OI Change)
Change in open interest (OI change) is the difference between a contract's current open interest and its open interest at the end of the previous trading day.
Implied Volatility (IV)
Implied volatility (IV) is the expected future volatility of the underlying that is implied by an option's market price, expressed as an annualised percentage.
Option Greeks
Option Greeks are measures of how an option's price changes when one input changes: delta for the underlying price, gamma for the change in delta, theta for the passage of time and vega for implied volatility.
Time Value (TV)
Time value is the part of an option's premium above its intrinsic value; it is what buyers pay for the chance that the option gains value before expiry.
Support and Resistance (from Option Chain)
In option chain analysis, support is the strike with the heaviest put open interest below the market and resistance is the strike with the heaviest call open interest above it, because option writers tend to defend the strikes they have sold.
OI Buildup
OI buildup is the reading of price change together with open interest change to tell what traders are doing: price up with OI up is long buildup, price down with OI up is short buildup, price up with OI down is short covering, and price down with OI down is long unwinding.
Historical Option Chain Data
Historical option chain data is the record of every strike's price, open interest, OI change and volume for past sessions.
Option Chain Backtest
An option chain backtest replays the option chain of a past trading session so you can see open interest, OI change, PCR and support and resistance as they stood at each minute, and check how a setup would have played out before using it with real money.
Option Chain Data in Excel
To get option chain data into Excel you can download the CSV from the NSE option chain page, which gives a one-time snapshot, or pull live quotes through your broker's API into a sheet that refreshes.
Option Calculator
An option calculator is a tool that estimates the fair price of an option and its Greeks from the spot price, strike, days to expiry, implied volatility and interest rate, usually with the Black-Scholes model.
Market Mood Index (MMI)
The Market Mood Index (MMI) is a fear and greed gauge for the Indian stock market on a scale of 0 to 100: readings below 30 mean extreme fear, 30 to 50 fear, 50 to 70 greed and 70 and above extreme greed.
Option Chain Stock Screeners
Option chain stock screeners scan every F&O stock's option chain for open interest patterns, so you get a short list of stocks with strong support and resistance or fresh positioning instead of reading around 200 chains by hand.
Option Chain Kaise Dekhe (Hindi)
Option chain ek table hai jisme kisi index ya stock ke saare call (CE) aur put (PE) options strike price ke hisaab se dikhte hain, har strike ka LTP, open interest (OI), OI change aur volume ke saath.
