How to read an option chain in five minutes: OI, PCR, max pain and walls
An option chain looks like a wall of numbers. Traders who use it every day read only four things from it, in this order.
1. Open interest by strike
Open interest is the number of contracts still open at a strike. Where call OI piles up above spot, sellers have sold that strike heavily and will defend it: that is resistance. Where put OI piles up below spot, put writers are betting the market stays above it: support. On the free NIFTY chain these show up as the call wall and put wall.
2. Put–call ratio
PCR is total put OI divided by total call OI. Around 0.8 to 1.2 is normal. Above 1.3 the crowd is loaded with puts, which often marks the late stage of a fall; below 0.7 it is loaded with calls, which often marks a tired rally. Watch the change through the day more than the level.
3. Max pain
Max pain is the strike at which the most option buyers lose at expiry. Price does not have to go there, but on expiry day it is where sellers would love it to pin, and it is a fair reference for "where will this settle if nothing happens".
4. Change in OI, not just OI
OI that was already there yesterday is old information. What matters is which strikes added or lost OI in the last 15 minutes and whether price rose or fell while they did. That combination is called build-up, and it is the difference between "resistance" and "resistance being attacked". The terminal's OISCAN panel tags every strike this way live; the build-up guide explains the four tags.
Putting it together
A chain with a fat call wall 200 points above spot, a fat put wall 200 points below, PCR near 1 and max pain in the middle is a range: sellers' territory. A chain where the call wall is being eaten by fresh call buying while put writers add below is a breakout in progress. The VIP Indicator reads this structure for you on the chart, and marks entries, stops and targets so you are not squinting at the table.