Understanding NSE Option Chain

To trade in options, we need to have following information with us

a) Underlying Security
b) Option Type – CALL or PUT
c) Contract Expiry
d) Strike price

Once you have all above information, you have unique identifier of the option contract that you can buy or sell in the
market. On easylivedata.com , there is link called Option Chain.Option chain lists the available option contracts of an underlying security that are currently traded in the market.

Expiry Date – This is the option contract’s expiry date. Various contract expiry that are traded in the market currently are listed here.

Open Interest - Number of open positions for a particular strike price.

LTP = Last traded price

Net Change – % change in the price at which a particular option is traded in market last, with respect to the closing
price of previous trading day.

Volume – Number of contracts traded today

Bid Quantity – Quantity given in the last open buy order for this particular strike price.

Bid Price – Price given in the last open buy order for this particular strike price.

Offer Price – Price given in the last open Sell order for this particular strike price.

Offer Quantity – Quantity given in the last open Sell order for this particular strike price.

In other words, bid price indicate the price that buyers is wiling to pay to buy the option contract, and Offer price indicates the price at which seller is willing to sell.

Lets take an example and try to find the latest quote from the table. Lets say we want to Buy, NIFTY PUT, Strike 5000,Feb-10 expiry,

So you ensure that you are looking at option chain of February-10 expiry.

Then go to the row strike related to strike price = 5000.
As you are interested in PUT, so pay attention to the numbers on the right part of the table in this row.

We see bid quantity of 1000 and bid price 239.20. I.e. someone is standing in the queue to buy the put at 239.20. So if we are a seller, then we will get this price for our market order. If we are placing market order to buy then we might have to pay more then 239.20.

Hope this information helps you in option trading. Feel free to leave comment below.
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