Questions about option chain analysis
How do I read an option chain?
Start at the at the money strike and read outwards. Each row is one strike, calls on the left and puts on the right, each with open interest, change in OI, volume, IV and the last premium. Check the expiry and the time stamp first.
Is the highest call OI strike always resistance?
No. Open interest counts open contracts, not who holds which side or why. The leading strikes also move from one date to the next, so one chain cannot show whether a strike held.
What does the put call ratio show?
Put open interest divided by call open interest across the strikes chosen. It describes how positions are split on one chain at one moment; on its own it does not say which way the index will move.
Does max pain predict where Nifty expires?
Max pain is a calculation from open interest, not a forecast. The module and the checker test it on past Nifty expiries, and it is not yet shown to beat simply staying at spot.