F&O Complete Guide

Overview

All Strategies at a Glance

Quick comparison — all spreads in one table

(Quick Reference) ▼

Strategy	Type	View	IV	Max Profit	Max Loss
Bull Call Spread	Debit	Bullish	Low	Spread minus Debit	Debit paid
Bear Put Spread	Debit	Bearish	Low	Spread minus Debit	Debit paid
Calendar Spread	Debit	Neutral	Low front	At short strike	Debit paid
Diagonal Spread	Debit	Directional	Low	Variable	Debit paid
Bull Put Spread	Credit	Bullish	High	Credit received	Spread minus Credit
Bear Call Spread	Credit	Bearish	High	Credit received	Spread minus Credit
Iron Condor	Credit	Neutral	High	Credit received	Spread minus Credit
Iron Butterfly	Credit	Neutral	Very High	Credit received	Spread minus Credit
Jade Lizard	Credit	Slight Bull	High	Full credit	Put spread loss
Broken Wing Butterfly	Credit	Directional	High	Credit plus width	Skipped wing

Debit Spreads — You Pay to Enter

Debit

Bull Call Spread

Buy lower call + Sell higher call · Same expiry

(Debit Spread) ▼

Moderately BullishLow IV preferred30-45 days to expiry

Setup

Buy Call 500 + Sell Call 520

You Pay

Net Debit e.g. Rs 7

Max Profit

Rs 13 (Spread 20 minus Debit 7)

Max Loss

Rs 7 only (debit paid)

Real Example

Stock at Rs 500. Buy 500 CE at Rs 15, sell 520 CE at Rs 8. Net cost = Rs 7.

If stock goes above Rs 520 at expiry: Max profit = Rs 13.

If stock stays below Rs 500: Max loss = Rs 7 only. You lose what you paid.

When to Use and IV Role

Use when you expect moderate upside — not a breakout, just steady rise. Low IV = options are cheap = better entry. Avoid in high IV — you pay too much and IV crush will hurt after any event.

Debit

Bear Put Spread

Buy higher put + Sell lower put · Same expiry

(Debit Spread) ▼

Moderately BearishLow IV preferred30-45 days to expiry

Setup

Buy Put 500 + Sell Put 480

You Pay

Net Debit e.g. Rs 8

Max Profit

Rs 12 (Spread 20 minus Debit 8)

Max Loss

Rs 8 only (debit paid)

Real Example

Stock at Rs 500. Buy 500 PE at Rs 18, sell 480 PE at Rs 10. Net cost = Rs 8.

If stock falls below Rs 480 at expiry: Max profit = Rs 12.

If stock stays above Rs 500: Max loss = Rs 8 only.

When to Use and IV Role

Use when you expect moderate downside. Low IV = cheap entry. Post high-IV event (earnings fear spike) crushes premium — bad time to buy puts.

Debit

Calendar Spread

Sell near-month + Buy far-month · Same strike

(Debit Spread) ▼

Neutral / SidewaysLow front IV neededFront: 7-21 days

Setup

Sell March 22000 CE + Buy April 22000 CE

Profit From

Time decay on short leg

Best Case

Price stays near strike at front expiry

Max Loss

Net debit paid

Real Example

Nifty at 22,000. Sell March 22000 CE at Rs 150, Buy April 22000 CE at Rs 200. Net cost = Rs 50.

Nifty stays near 22,000: March CE expires worthless, April CE still has value. Profit!

Nifty moves sharply in any direction: Both legs hurt. Max loss = Rs 50.

When to Use and IV Role

Best when market expected to stay sideways. Works when front month IV is high (sell expensive) and back month IV is low (buy cheap).

Debit

Call and Put Ratio Spread

Buy 1 option + Sell 2 options at further strike — Advanced only

(Debit Spread) ▼

Mildly DirectionalLow IV preferredWarning: Risky

Call Ratio Setup

Buy 1 Call 500 + Sell 2 Calls 520

Risk

Unlimited if price moves hard past short strikes

Max Profit

At the short strike at expiry

Best For

Slow controlled move only

When to Use and IV Role

Use only when expecting a slow, controlled move — never a breakout. Low IV makes it cheaper. Always set a hard stop loss. Not for beginners.

Credit Spreads — You Receive Premium

Credit

Bull Put Spread

Sell higher put + Buy lower put · Same expiry

(Credit Spread) ▼

Slightly BullishHigh IV preferred15-30 days to expiry

Setup

Sell Put 22000 + Buy Put 21800

You Receive

Net Credit e.g. Rs 35

Max Profit

Rs 35 — if price stays above 22000

Max Loss

Rs 165 (Spread 200 minus Credit 35)

Real Example

Nifty at 22,200. Sell 22000 PE at Rs 80, Buy 21800 PE at Rs 45. Credit = Rs 35.

Nifty stays above 22,000: Both PEs expire worthless. Keep full Rs 35 credit.

Nifty falls below 21,800: Max loss = Rs 165.

Time decay works FOR you every day the price stays above your sold strike.

When to Use and IV Role

High IV = fatter credit = better odds. Favourite of professional traders. Best after a volatility spike when fear is high. Works well when PE Wall is strong below your sold strike.

Credit

Bear Call Spread

Sell lower call + Buy higher call · Same expiry

(Credit Spread) ▼

Slightly BearishHigh IV preferred15-30 days to expiry

Setup

Sell Call 500 + Buy Call 520

You Receive

Net Credit e.g. Rs 7

Max Profit

Rs 7 — if price stays below 500

Max Loss

Rs 13 (Spread 20 minus Credit 7)

Real Example

Stock at Rs 490. CE Wall at Rs 500. Sell 500 CE at Rs 12, Buy 520 CE at Rs 5. Credit = Rs 7.

Stock stays below Rs 500: Both expire worthless. Profit = Rs 7.

Stock breaks above Rs 520: Max loss = Rs 13.

CE Wall at Rs 500 is the natural resistance = ideal sell strike!

When to Use and IV Role

Use when market is capped or bearish. Sell at or above CE Wall. High IV = collect more premium. Time decay works for you. Ideal after a bounce into strong resistance.

Credit

Iron Condor

Bull Put Spread + Bear Call Spread combined

(Credit Spread) ▼

Neutral / SidewaysHigh IV preferred20-40 days to expiry

Setup

Sell Put 21700 + Buy Put 21500 + Sell Call 22300 + Buy Call 22500

Profit Zone

Price stays between 21700 and 22300

Max Profit

Total credit received

Max Loss

Larger spread minus total credit

Real Example

Nifty at 22,000. Use CE Wall as upper boundary, PE Wall as lower boundary for sold strikes.

Nifty stays in range: All 4 legs expire worthless. Keep full credit.

PCR neutral + Max Pain near center = ideal Iron Condor confirmation.

When to Use and IV Role

Best in high IV + sideways market. After earnings when IV crush happens. Use CE Wall as upper sell strike and PE Wall as lower sell strike.

Credit

Iron Butterfly

ATM short straddle + OTM long wings

(Credit Spread) ▼

Strictly NeutralVery High IV15-25 days to expiry

Setup

Buy Put 480 + Sell Put 500 + Sell Call 500 + Buy Call 520

Sweet Spot

Price exactly at 500 at expiry

Max Profit

Highest of all credit strategies

Max Loss

Spread width minus credit

When to Use and IV Role

Only in very high IV. Pin trade — use Max Pain as center strike. Tight profit zone needs active management.

Advanced

Jade Lizard and Broken Wing Butterfly

Advanced credit strategies — unique risk profiles

(Credit Spread) ▼

Jade Lizard

Bull Put Spread + Naked Call above. No upside risk if credit is greater than call spread. High IV needed.

Broken Wing Butterfly

Asymmetric butterfly. Enter for zero cost or small credit. One wing wider = skewed risk. Popular with index traders.

When to Use

Both work best in high IV. Study these only after mastering basic spreads. Jade Lizard = slightly bullish lean. BWB = enter for free with defined risk.

IV Guide

IV Role — When to Buy vs Sell Spreads

Implied Volatility decides your strategy

(Guide) ▼

IV Level	Meaning	Use These	Avoid
Very High (VIX spike)	Options very expensive	Iron Condor, Credit Spreads, Jade Lizard	Buying any debit spread
High (elevated)	Good premium to sell	Bull Put, Bear Call, Iron Butterfly	—
Normal	Average premiums	Any strategy	—
Low	Options cheap to buy	Bull Call, Bear Put, Calendar	Naked selling (low reward)
IV Crush (post-event)	IV drops sharply	Pre-event credit spreads benefit	Buying options before events

OI Buildup Signals

Bullish

Long Build — Price up + OI up

Fresh buying entering the market

(Credit Spread) ▼

What it means

New long positions being added. Bulls are confident and entering fresh.

Strong signal when price up 1%+ AND OI up 5%+ together.

Confirm with PCR above 1.2 and Max Pain above spot for highest confidence.

Real Example

Reliance at Rs 2800. OI jumps from 50L to 65L. Price moves from Rs 2800 to Rs 2850.

Signal: Strong Long Build. Fresh buyers entering above Rs 2800 level.

Trade: Buy 2900 CE or enter Bull Put Spread below Rs 2800 support.

How to Trade

Buy calls or Bull Call Spread on strong Long Build stocks. Sell Bull Put Spread below support for income. Best entry: first confirmation candle after Long Build signal appears.

Bearish

Short Build — Price down + OI up

Fresh selling entering the market

(Debit Spread) ▼

What it means

New short positions entering. Bears are actively selling futures.

Larger the OI increase with falling price = stronger the bearish signal.

Short covering rally can be sharp — always define your stop loss first.

Real Example

IT stock at Rs 3200. OI rises 40%. Price falls Rs 3200 to Rs 3100 in 2 days.

Signal: Strong Short Build. Institutions shorting futures aggressively.

Trade: Bear Put Spread or Bear Call Spread above current resistance.

How to Trade

Buy puts or Bear Put Spread on Short Build stocks. Sell Bear Call Spread above resistance for income. Combine with CE Wall for high confidence entries.

Unwind

Short Unwind and Long Unwind — OI falling

Existing positions closing — weak signals

(Reference) ▼

Signal	Price	OI	Meaning	Action
Short Unwind	Up	Down	Shorts covering — weak rally, not fresh buying	Ride the bounce but do not chase
Long Unwind	Down	Down	Longs exiting — distribution happening	Avoid buying dips — institutional exit

Max Pain

Max Pain — Option Sellers Magnet

The price where most option buyers lose money at expiry

(Guide) ▼

Core Concept

Max Pain = strike where total option buyer loss is maximum. Large players (option sellers) tend to pull price here near expiry.

Most reliable in the last 5 trading days before expiry. Less useful 3+ weeks out.

Gap% = how far spot is from Max Pain. Larger gap = stronger expected pull toward Max Pain.

Real Example

Nifty at 22,100. Max Pain at 22,000. Gap = minus 0.45%.

Max Pain below spot = Downward pull expected toward 22,000.

Trade: Sell Bear Call Spread at 22,200 to 22,400. Or sell Iron Butterfly at 22,000.

Situation	Signal	Strategy
Max Pain above spot	Upward pull expected	Bull Put Spread below spot
Max Pain below spot	Downward pull expected	Bear Call Spread above spot
Max Pain equals Spot	Price likely to stay pinned here	Iron Butterfly at Max Pain strike

PCR — Put Call Ratio

PCR

PCR Complete Guide

PCR = Total Put OI divided by Total Call OI

(Reference) ▼

PCR Value	Signal	Meaning	Strategy
Above 1.5	Very Bullish	Too many puts — market likely to rally	Bull Put Spread, Long Calls
1.2 to 1.5	Bullish	Strong put support below — bullish bias	Bull Put Spread, Bull Call Spread
0.8 to 1.2	Neutral	Balanced — sideways market likely	Iron Condor, Iron Butterfly
0.5 to 0.8	Bearish	Too many calls — resistance above	Bear Call Spread, Bear Put Spread
Below 0.5	Very Bearish	Extreme call buying — market likely to fall	Bear Call Spread, Long Puts

Real Example

Nifty PCR = 0.62. Bearish reading. Too many call buyers vs put buyers.

Signal: Market has resistance above. Upside is limited.

Trade: Sell Bear Call Spread at CE Wall level. Avoid buying calls.

OI PCR vs Volume PCR: OI PCR uses open interest = longer-term view, more reliable. Vol PCR uses today's volume = intraday sentiment, faster. When both agree = strong confirmation. When both disagree = wait for clarity before trading.

Walls

CE Wall and PE Wall

Highest OI strikes = key resistance and support levels

(Reference) ▼

CE Wall (Resistance)

Strike with highest Call OI. Large call writers defend this. Price struggles to cross above. If broken = bullish breakout!

PE Wall (Support)

Strike with highest Put OI. Large put writers defend this. Price bounces from here. If broken = bearish breakdown!

Real Example

Nifty at 22,100. CE Wall at 22,200. PE Wall at 22,000.

Market sandwiched. Likely stays between 22,000 and 22,200. Sell Iron Condor in this range.

Nifty breaks 22,200 with volume: Short squeeze! Enter Bull Call Spread.

Nifty breaks 22,000 with volume: Long squeeze! Enter Bear Put Spread.

Futures Premium and Discount

Futures

Futures Premium and Discount Guide

Futures Price vs Spot Price difference tells you market direction

(Guide) ▼

Premium (Futures above Spot)

Futures trading above spot price. Participants expect price to rise. Bullish sentiment.

Discount (Futures below Spot)

Futures trading below spot price. Participants expect price to fall. Bearish sentiment.

Real Example

Reliance Spot = Rs 2800. Futures = Rs 2812. Premium = +0.43%. Bullish bias.

INOXWIND Spot = Rs 79.77. Futures = Rs 80.00. Small +0.29% premium = mild bullish.

If futures go to discount = longs exiting or shorts building. Watch for trend change.

Situation	Signal	Action
Rising premium + Long Build	Strong bullish	Enter bullish spreads, ride momentum
Falling to Discount + Short Build	Strong bearish	Enter bearish spreads, avoid longs
Premium shrinking fast	Longs exiting	Book profits on long trades
Discount + Short Unwind	Potential reversal	Watch for bounce and short squeeze

Checklist

5-Point Pre-Trade Checklist

Use all 5 together for highest probability trades

(Credit Spread) ▼

#	Check	Bullish Signal	Bearish Signal
1	OI Buildup	Long Build	Short Build
2	PCR	PCR above 1.2	PCR below 0.8
3	Max Pain	Max Pain above spot	Max Pain below spot
4	CE and PE Wall	PE Wall strong below	CE Wall strong above
5	Futures	Premium expanding	Discount or shrinking

Score Rule: 5 out of 5 = Full size trade. 4 out of 5 = Normal size. 3 out of 5 = Half size. 2 or less = Skip the trade.

What

What is Bhav Data?

NSE end-of-day F&O file — your daily data source

(Reference) ▼

Bhav Data = NSE official daily F&O data. Contains every futures and options contract price, OI, and volume for that day.

Available after market close (around 6 PM) on NSE website as a ZIP file.

Our tool processes this file and shows all signals — OI Buildup, Max Pain, PCR, CE and PE Wall — in one dashboard.

Load Data

How to Load Data — Step by Step

Auto fetch or manual ZIP upload

(Reference) ▼

Click Fetch from NSE button

The tool automatically downloads today's bhavcopy from NSE. Fastest option — works after market close around 3:45 PM.

OR download ZIP manually from NSE

Go to NSE website, All Reports, then Derivatives. Download the F&O Bhavcopy ZIP for today. Then drag and drop it on the tool upload area.

Load Previous OI — Recommended

Click Load Prev OI and upload yesterday's ZIP. This enables the OI Change% column which shows how much OI changed since yesterday. This is the key to Long Build and Short Build signals.

Dashboard is ready

All tabs activate: OI Buildup, PCR, Max Pain, Most Active, Call Trap, Put Trap, Charts, Top 5, Pulse.

OI Tab

How to Read OI Buildup Tab

Main tab — most important signals are here

(Credit Spread) ▼

Select Signal Type

4 tabs: Long Build (bullish), Short Build (bearish), Short Unwind, Long Unwind. Start with Long Build and Short Build tabs.

Read the Columns

Price = Futures close price. Chg% = Price change today. OI(K) = Open interest in thousands. OI Chg% = How much OI changed vs yesterday (needs Prev OI loaded). P badge = futures at Premium (bullish). D badge = Discount (bearish).

Find the Strongest Signals

Best Long Build = Price up 1% or more AND OI up 5% or more together. Sort by Chg% to find top movers quickly.

Use Signal Icons

Each symbol has a small colored circle next to it. Hover over it for full explanation of what the signal means and how to trade it.

Max Pain Tab

How to Read Max Pain Tab

Find expiry targets and wall levels

(Guide) ▼

Check Gap% Column

Gap% = (Max Pain minus Spot) / Spot x 100. Positive = Max Pain above spot (upward pull). Negative = Max Pain below spot (downward pull). Larger number = stronger pull.

Check CE Wall and PE Wall Columns

CE Wall = resistance level. PE Wall = support level. CE Dist% = how far spot is from CE Wall. If CE Dist = 0% or negative = CE Wall broken = bullish breakout signal!

Click Any Row for Pain Table

Shows every strike with Call Pain, Put Pain, and Total Pain. Gold highlighted row = Max Pain strike. Blue = nearest strike to current spot.

Sort by Gap% for Opportunities

Stocks with large Gap% have the most room to move toward Max Pain. Best candidates for credit spreads near expiry week.

PCR Tab

How to Read PCR Tab

Market sentiment stock by stock

(Reference) ▼

Check Overall Banner at Top

Shows market-wide average PCR. If it says Overall Bearish with Avg PCR 0.62 then market is generally bearish. Do not fight the overall trend.

Filter by Bullish or Bearish Tab

Bullish tab = stocks where PCR above 1.2 (put support strong). Bearish tab = stocks where PCR below 0.8 (call resistance strong). These are your best trade candidates.

Watch for Mixed Signal Icon

Yellow warning icon means OI PCR and Volume PCR disagree. Skip or reduce size on these stocks until signals align.

Traps Tab

Call Trap and Put Trap Tabs

Breakout and breakdown squeeze signals

(Debit Spread) ▼

Call Writer Trap

Spot reached CE Wall. Call writers who sold calls are now losing. They are forced to buy back. Result: Upward squeeze possible.

Put Writer Trap

Spot reached PE Wall. Put writers who sold puts are now losing. They are forced to sell. Result: Downward squeeze possible.

Trading Tip: Call Trap = Buy CE or Bull Call Spread with stop below CE Wall. Put Trap = Buy PE or Bear Put Spread with stop above PE Wall. Confirm with volume spike for best entries.

Basics

What is an Option Chain?

A table showing all calls and puts for a stock or index

(Reference) ▼

Option chain = a live table showing every available strike price for a stock or index. CALL options on the left side. PUT options on the right side.

Center column = Strike Price. This is your reference point for everything.

Green rows = In The Money (ITM). White rows = Out of The Money (OTM). ATM = closest strike to current market price.

CALLS (Left Side)			Strike	PUTS (Right Side)
OI	IV	Price	Strike	Price	IV	OI
12,500	18%	Rs 45	22,000	Rs 38	17%	10,200
8,200	16%	Rs 28	22,100 ATM	Rs 52	16%	15,600
5,100	14%	Rs 15	22,200	Rs 71	19%	22,400

Notice: 22,200 strike has very high Put OI (22,400) = PE Wall = Strong support below. This is where put writers are defending.

Columns

What Each Column Means

OI, IV, Price, Volume — explained simply

(Reference) ▼

Open Interest

Total active contracts at that strike. High OI = many people have positions there = strong support or resistance. Highest Call OI = CE Wall. Highest Put OI = PE Wall.

Implied Volatility

How much movement the market expects. High IV = expensive options = good to sell. Low IV = cheap options = good to buy. OTM options usually have higher IV than ATM.

LTP

Last Traded Price

Current market price of that option. What you pay to buy or receive to sell. ATM options are most liquid — best to trade for tight spreads.

Vol

Volume

How many contracts traded today. High volume at a strike = strong activity. If volume is greater than OI = new positions being created aggressively = important signal.

Reading OI

How to Read OI in Option Chain

The most important skill for F&O traders

(Guide) ▼

Find CE Wall (Resistance)

Look at the Call OI column. Find the strike with highest OI. That is your CE Wall. Market will struggle to go above this level.

Find PE Wall (Support)

Look at the Put OI column. Find the strike with highest OI. That is your PE Wall. Market will bounce from this level.

Calculate PCR

Add up all Put OI numbers. Add up all Call OI numbers. Divide Put total by Call total = PCR. Above 1.2 = bullish. Below 0.8 = bearish.

Watch for Wall Shifts

If Call OI at a strike is falling rapidly during the day = shorts covering = bullish breakout possible. If Put OI at a strike falls rapidly = longs unwinding = bearish breakdown possible.

Real Example

Nifty at 22,100. Highest Call OI at 22,200 = CE Wall. Highest Put OI at 22,000 = PE Wall.

Market range for this expiry: 22,000 to 22,200. PCR = 1.3 = Bullish.

Trade: Sell Iron Condor with PE wall at 22,000 and CE wall at 22,200. Collect premium for sideways market.

ITM/ATM/OTM

ITM, ATM, OTM Explained

Which strikes to use for buying and selling

(Reference) ▼

Type	For Calls	For Puts	Characteristics	Best Use
ITM	Strike below spot	Strike above spot	Expensive, high delta, behaves like stock	Buy when you want stock-like exposure
ATM	Strike near spot	Strike near spot	Most active, high gamma, 0.5 delta	Most liquid — best for buying or selling spreads
OTM	Strike above spot	Strike below spot	Cheap, low delta, lottery ticket	Sell OTM for credit spreads — high chance of expiring worthless

Simple Rule: Buy ATM or slightly ITM for directional trades. Sell OTM for credit spreads. Never buy deep OTM options hoping for big moves — they expire worthless more than 80% of the time.

Greeks

Option Greeks Simply Explained

Delta, Gamma, Theta, Vega — what they mean for you

(Credit Spread) ▼

Greek	What it measures	Simple meaning	Buyer wants	Seller wants
Delta	Price sensitivity	If stock moves Rs 1, ATM option moves Rs 0.50. Range is 0 to 1.	High delta (ITM)	Low delta (OTM)
Gamma	Delta change rate	How fast delta changes. High gamma = option reacts quickly. Highest at ATM near expiry.	High gamma	Low gamma
Theta	Time decay	How much option loses per day just from time passing. Enemy of buyers, friend of sellers.	Slow theta	Fast theta
Vega	IV sensitivity	How much option value changes when IV moves 1%. High IV = expensive option = high vega.	Rising IV	Falling IV

Key Insight: Option buyers fight against Theta every single day. Option sellers profit from Theta every single day. This is why credit spreads in high IV environments are the professional approach — you collect premium AND time decay works in your favor.

Morning Routine

30-Second Option Chain Morning Scan

Do this every day before trading

(Credit Spread) ▼

Find ATM Strike

Nifty at 22,100 = ATM is 22,100 or the nearest round number. This is your anchor for everything else.

Identify CE Wall and PE Wall

Scan Call OI column for highest number = CE Wall. Scan Put OI column for highest number = PE Wall. These are your support and resistance for the day.

Calculate or Check PCR

Above 1.2 = bullish. Below 0.8 = bearish. Between = neutral. Do not fight the overall PCR direction.

Check ATM IV vs Last Week

IV rising = options getting expensive = prefer selling. IV falling = options getting cheap = prefer buying.

Choose Your Strategy

Price between CE and PE Wall with neutral PCR = Iron Condor. PCR bullish + price near PE Wall = Bull Put Spread. PCR bearish + price near CE Wall = Bear Call Spread.