Learn options, the plain-English way
Everything here is what RAM actually reads off the option chain every few seconds. Understand these five ideas and you'll read your dashboard like a trader.
1. The option chain
An option chain is a table of every strike price for NIFTY (or Bank Nifty), with two halves:
- Call side (CE) - options that profit if the index rises.
- Put side (PE) - options that profit if the index falls.
For every strike the chain shows the premium (price), how many contracts are open (open interest), how that changed today, and the implied volatility (IV).
ATM - "at the money": the strikes closest to the current spot price. This is where most activity, IV and premium sit.
RAM auto-centres on the ATM strikes so the live table keeps the important rows in view as the market moves.
2. Open interest (OI)
Open interest is the number of option contracts currently open at a strike. It is the footprint of where money is parked.
- Rising OI in calls - more traders are selling/expecting a ceiling at that strike.
- Rising OI in puts - more traders see a floor at that strike.
- The strike with the highest OI on each side is where the market tends to be "held" - a magnet that often resists price.
Change in OI - OI growing or shrinking today tells you whether a level is being built or unwound. RAM watches both raw OI and its change.
3. Implied volatility (IV)
IV is the market's expectation of how much the index will move, expressed as an annualised percentage. It is not a prediction - it is a price.
- High IV - options are expensive. Great for selling premium, bad for buying.
- Low IV - options are cheap. Bad for selling, better for buying.
- After big events (elections, RBI policy, budget) IV often craters - that "volatility crush" is why buyers lose even when they were right.
IV crush - when IV falls sharply, option premiums fall with it even if the index doesn't move. It is the quiet killer of option buyers.
4. Put-call ratio (PCR)
PCR = total put open interest ÷ total call open interest.
- PCR above ~1 - traders are holding more puts; sentiment is cautious (or hedged).
- PCR well below 1 - more call exposure; optimism (or leverage).
- Extreme readings on either side often mark overbought/oversold zones.
PCR is one clue, never a signal by itself. RAM uses it alongside OI, IV, premium floor and max pain before taking a trade.
5. Risk & the stop-loss
If there is one lesson on this page, it is this: risk comes first, always.
Options can lose more than you put in. Selling options without protection can produce theoretically unlimited loss. Never sell naked options with money you cannot afford to lose.
RAM is built around defined risk and hard stops:
- Every live trade has an automatic stop-loss and target.
- Daily and weekly loss caps halt trading when breached.
- An emergency stop on your dashboard closes everything instantly and switches to paper mode.
- Your trial starts in paper mode - rehearse before risking a rupee.
Paper trade first. Learn the dashboard. Then, and only then, consider going live - with capital you can afford to lose.