Chapter 05 of 6 · 4 lessons · Concept, Verdict
Positioning
These four read the chain as a record of positions rather than prices. Each lesson states what the figure counts and stops short of what it is often claimed to predict.
Price records what the last trade happened at. The chain's open interest columns record something different: how many contracts remain outstanding at each strike, and therefore where positions have accumulated rather than where trading occurred.
That distinction drives the chapter. Volume counts contracts traded during a session and resets each morning; open interest counts contracts still open and carries forward, rising only when a buyer and a seller both open and falling only when both close. Heavy volume against flat open interest is contracts changing hands rather than positions being built, and no direction should be read into it.
The figures derived from those columns - put-call ratio, max pain - are arithmetic on a distribution and nothing more. What gets attached to them is a claim about what price will do next. These lessons state what each figure counts and stop where the evidence does: the max pain lesson publishes its test method and reports that a single expiry cannot answer the question it is usually asserted to settle.
By the end of this chapter
- Say what open interest counts and what it cannot tell you
- Read a put-call ratio with its timestamp, and know why that matters
- Compute max pain, and describe the claim made about it
- Judge whether a claim about the chain has been tested or only repeated
The lessons
In order, though each one stands on its own.
Common questions
What does open interest tell you about direction?
By itself, nothing. Open interest is a net count of outstanding contracts and records neither who initiated a trade nor why. The four conventional buildups pair it with price movement, but the same movement is consistent with several different sets of participants doing different things.
What is a good PCR value?
There is no single value, and a ratio quoted without a timestamp means little. NIFTY read 1.152 pre-market on 22 September 2026 and 0.832 from the same day's closing chain - one figure, two ends of one session.
Does price get pulled towards max pain?
Widely claimed and rarely tested. Our per-minute archive currently holds one NIFTY expiry, on which max pain read 23,450 and the index settled at 23,329. One observation cannot answer it, which is what that lesson says rather than generalising from it.
Written and maintained by MarketCue research
How these figures are produced
Every price on these pages was traded on the exchange and is read from our own option-chain capture, which records the NIFTY and SENSEX chains once a minute through the session. Each page names the session its figures come from.
Figures that a model produced rather than the market — the Greeks, implied volatility — are labelled as model outputs wherever they appear, and never presented beside traded prices without saying which is which. The pricing is checked against published reference values on every change.
Where our own data cannot support a claim, the page says so instead of generalising. MarketCue is not a registered investment adviser, research analyst or broker under SEBI regulations.