Options Glossary
Plain-English definitions of the NIFTY options terms you will see across Nakshatra — from the basics like open interest and ATM strikes to the derived reads like max pain, VWAP break-even, and OI cohort exits.
- Open Interest (OI)
- The total number of outstanding option contracts at a strike that are not yet settled or closed. Rising OI shows fresh positions building; falling OI shows positions being unwound. Learn more →
- PCR (Put-Call Ratio)
- Total put open interest divided by total call open interest. A high PCR can signal bearish positioning (or a crowded put trade), while a low PCR leans bullish. Learn more →
- Implied Volatility (IV)
- The market's expectation of how much the underlying will move, backed out of the option's price. Higher IV means richer premiums and a wider expected range. Learn more →
- Max Pain
- The strike at which the combined value of in-the-money calls and puts is smallest — the price where option buyers, in aggregate, lose the most at expiry. Spot often drifts toward it near expiry. Learn more →
- ATM (At The Money)
- An option whose strike is closest to the current spot price. ATM options carry the most time value and the highest sensitivity to spot moves.
- ITM (In The Money)
- An option with intrinsic value — a call below spot, or a put above spot. ITM options cost more because part of the premium is already real value.
- OTM (Out Of The Money)
- An option with no intrinsic value — a call above spot, or a put below spot. OTM premiums are pure time value and decay fastest toward expiry.
- Straddle
- Buying (or selling) both the call and put at the same ATM strike. The combined premium is the market's priced expected move for the period — a key read on the Insights tab.
- BEP (Break-Even Point)
- The spot level at which an option position breaks even at expiry: strike plus premium for a call, strike minus premium for a put. Nakshatra computes a VWAP-based BEP for the average buyer of the day.
- VWAP (Volume-Weighted Average Price)
- The average traded price of an option weighted by volume over the trading day. It approximates what the typical buyer actually paid, which anchors the break-even read.
- OI Buildup
- The pattern of open-interest change paired with price change at a strike — long buildup, short buildup, long unwinding, or short covering — which hints at whether smart money is positioning long or short. Learn more →
- Cohort Exit
- Nakshatra's inference of when positions opened on a given day later get unwound, attributing each OI drop to short covering or long liquidation using the delta-adjusted premium move. It shows who is exiting and how much. Learn more →
- FII (Foreign Institutional Investor)
- Overseas institutions trading Indian markets. Their daily net buy/sell in cash and derivatives is a closely watched directional signal. Learn more →
- DII (Domestic Institutional Investor)
- Indian institutions such as mutual funds and insurers. DII flows often counterbalance FII flows and shape the day's net institutional bias. Learn more →
- Expiry
- The date on which an option contract settles and ceases to exist. NIFTY options have weekly and monthly expiries; behaviour like max-pain pull intensifies as expiry approaches.
- NIFTY Option Chain
- The full grid of NIFTY call and put contracts across strikes and expiries, showing OI, volume, IV, and last price — the raw data Nakshatra snapshots every five minutes. Learn more →