What is an Option Chain in Indian Stock Market:

Option chain is a collection of information made available in a tabled format. In fact, whenever I decide to execute a call or put in an option contract, the option chain tabular form becomes valuable information on trade analytics.

Everytime, when I begin to analyse the underlying asset, I seek the help of the option chains. I would like to list a few option chain tools which you may find suitable for you as well, and they are NSE Option Chain, Sensibull, or Nifty Trader.

From the above said, one thing I made clear is, take the help of Option Chain to make better analysis on your chosen security. Now, let us move further and see what the option chain comprises.

These option chain tools publish information on parameters like open interest, change in open interest, volume, volatility, option greeks. These parameters are dependent on the select strike price and the specific expiration date.

For instance, option chain tools give striking information for the underlying asset like banks, technology, pharmaceuticals, etc when such a category is selected for the desired option chain table.

Features of Option Chain

Please go through the characteristic features of option chain as mentioned point wise.

1. If you carefully view the option chain table, you can observe two segments, namely, calls Vs puts and both categorized by expiry date.
2. The option chain does carry options contracts on your desired security like stocks, index, currency, or commodity.
3. The consolidated option chain information that navigates your market research analysis does lead to proper planning of the trading strategy.

Example of Option Chain (National Stock Exchange):

Steps to Operate the NSE Option Chain Tool:

You will have to decide whether you want to gather option chain info on equity stock, currency, interest rates, or commodities. Then click the concerned knob.

In the example, I have clicked the equity stock tab, therefore it will lead to a display of four parameters, view options contracts for, or select symbol, expiry date, or strike price.

You can see that I have opted for the select symbol and chosen Axis Bank and likewise I selected the strike price option, at INR 780.00 and you can find a display of the filtered parameters.

For the chosen strike price, you can wait for the call option on two different expiry dates, 31 August 2023, or 28 September 2023.

You can correspondingly see bid quantity, bid price, ask price, bid quantity, and so on. You can decide on the call option (buying equity stocks) depending upon your convenience from the created option chain table.