Silver - Option Chain Analysis

 1. Max Pain Strike Price Calculation

"Max Pain" is the strike price at which the maximum number of option contracts expire worthless, causing the maximum financial loss for option buyers and the maximum profit for option sellers (writers).

To calculate this, we look for the strike price where the cumulative Open Interest of In-The-Money (ITM) Call options equals the cumulative Open Interest of ITM Put options.

  • Cumulative Call OI (strikes below 250,000): ~1,019 contracts

  • Cumulative Put OI (strikes above 250,000): ~956 contracts

  • If we move the price below 250,000: Put pain increases drastically due to heavy PE OI at 250,000 (257 contracts) and 240,000 (455 contracts).

  • If we move the price above 250,000: Call pain spikes violently because of the massive Call OI exactly at 250,000 (1,066 contracts).

Conclusion: The exact mathematical crossing point where option writers lose the least amount of money is 250,000.
Max Pain = 250,000

2. Support and Resistance Analysis (Open Interest)

Since this is a very long-dated option chain (LEAPS - expiring in 2026), Open Interest tends to concentrate on major psychological round numbers.

Major Resistance Zones (Highest Call OI):

  • 300,000 CE (OI = 1,067): This is the ultimate upside macro-resistance. Option sellers heavily doubt the underlying will breach this level by early 2026.

  • 250,000 CE (OI = 1,066): Immediate structural resistance and the Max Pain point.

  • 240,000 CE (OI = 647): Near-term At-The-Money (ATM) resistance.

Major Support Zones (Highest Put OI):

  • 150,000 PE (OI = 653): A deep Out-Of-The-Money (OTM) support. This is likely institutional tail-risk hedging or margin-benefit positioning.

  • 200,000 PE (OI = 496): The primary psychological floor and macro support for this expiry.

  • 240,000 PE (OI = 455): Immediate ATM support.

3. Put/Call Ratio (PCR) Analysis

By aggregating the total Open Interest across the entire provided chain:

  • Total Call OI: ~6,935 contracts

  • Total Put OI: ~4,217 contracts

  • Overall OI PCR: ~0.60

Interpretation: A PCR of 0.60 indicates that there are significantly more Call options written than Put options. In a long-dated chain, this usually means structural ceiling pressure. Heavy Call writing (especially at 250k and 300k) shows that large participants are capping the upside, expecting a measured or sideways market over the next year rather than a hyper-bullish run.

4. Market View & Strategy Analysis

  • The 240,000 "Straddle" Battlefield: With the current spot price at 241,393, the 240,000 strike is seeing high activity on both sides (Call OI = 647, Put OI = 455). Option writers are currently collecting heavy premium near the spot price, betting on short-term consolidation around the 240k mark.

  • Mildly Bullish Skew to Expiry: The underlying spot is roughly 241k, but the Max Pain is sitting higher at 250k. Generally, markets tend to gravitate toward the Max Pain point as expiry approaches. This implies a mildly bullish bias where the asset could drift upward toward 250,000, enriching option writers before facing the massive brick wall of Call resistance.

  • Fragmented Liquidity: Characteristic of LEAPS, you will notice highly illiquid strikes with zero volume/trades (indicated by commas ,,, for Open/High/Low) but existing Open Interest. Pricing heavily depends on intrinsic value for deep ITM strikes here.

Summary

  • Max Pain: 250,000

  • Current Trend: Mildly Bullish drift expected (Spot at 241k moving toward 250k pain point).

  • Trading Range (Macro): 200,000 (Floor) to 300,000 (Ceiling).

  • Trading Range (Micro): 240,000 to 250,000.

Comments

Post a Comment

Popular posts from this blog

Road Map for learning KP Astrology from Basics to Mastery

Phase 1: Foundations of Vedic Astrology Before diving into KP astrology, you need to understand the basics of Vedic astrology, as KP is a derivative system. Learn the Basics : Zodiac Signs : Characteristics of 12 signs (Aries to Pisces). Houses : Significance of 12 houses in astrology. Planets : Roles and attributes of 9 planets (Sun, Moon, Mars, Mercury, Jupiter, Venus, Saturn, Rahu, Ketu). Aspects : How planets influence each other through drishti (aspect). Nakshatras : The 27 lunar constellations and their traits. Familiarize with Astrology Tools : Learn how to draw and read a basic birth chart (D1 or Rashi chart). Understand the Panchanga (five limbs of astrology) and their influence. Study Basic Principles : Study planetary combinations (yogas). Learn how to identify planetary strengths (exaltation, debilitation, combustion, retrogression). Phase 2: Introduction to KP Astrology Once you have a strong foundation, start learning KP-specific techniques. Und...
Read more

Nifty - Detailed Analysis - 28th Feb'25

 Nifty 50 daily chart analysis using multiple technical methodologies, including Elliott Wave Theory, Fibonacci Ratios, Gann Angles, Pivot Points, and Trendlines. The analysis will include: Nifty 50 Daily Chart Technical Analysis 1. Elliott Wave Theory ( NIFTY 50 Elliott Wave Analysis: Trend Reversal and Forecast for 2025 - Elliott Wave Trading Education > Blogs List ) Figure: Nifty 50 daily chart with a labeled Elliott Wave count, showing a five-wave advance into late 2024 (peak near 26,300) followed by a corrective decline. The chart suggests the recent down-move is part of a Wave ((ii)) correction (grey labels), with an expected Wave ((iii)) to the downside to follow (orange projection). This aligns with the view that the prior bullish cycle (Wave (5) in orange) has completed, and the index is now in a multi-wave corrective phase. According to Elliott Wave analysis, Nifty’s uptrend peaked in late September 2024 after a five-wave impulse rally ( NIFTY 50 Elliott Wave A...
Read more