Nifty Option Chain Analysis (04 Nov 2025) — How to Select the Correct Premium
A practical, step‑by‑step guide with a real example from the 04 Nov 2025 weekly expiry. By Trend Spot Trader.
Quick Snapshot
- Index: Nifty 50
- Spot Price: 25,936.20
- Expiry: 04 Nov 2025 (Weekly)
- Key Range: 25,800 – 26,200
Standard: How to Select the Correct Option Premium (Repeatable Process)
- Define your market bias — Bullish: Calls, Bearish: Puts, Neutral: Straddle/Strangle. Use moving averages and price action to confirm bias.
- Choose time horizon — Intraday: same-day/weeklies. Swing: next-week or monthly to reduce theta.
- Check Implied Volatility (IV) — High IV favors sellers; low IV favors buyers. Prefer buying when IV is below its recent range.
- Identify OI clusters — Large Open Interest builds at strikes that act as support/resistance. These are the most important strikes to base premium selection on.
- Pick strike relative to probability & budget —
- ITM: expensive, higher delta — for conservative traders.
- ATM: balance of probability & premium — good default choice.
- OTM: cheap but lower chance to finish in‑the‑money — use when you expect a sharp move.
- Consider Greeks — Delta gives expected directional exposure; Theta warns about time decay; Vega tells premium sensitivity to IV.
- Set risk rules — Max loss (% of premium), stop-loss, and exit targets (e.g., 50–100% profit target). Never risk more than your plan allows.
- Confirm with order flow — Volume + OI increase supports the trade idea. Avoid taking unilateral trades against strong OI flow unless you have a hedge.
Practical Example — Nifty (04 Nov 2025 Weekly Expiry)
Below is a practical walkthrough applying the standard process to the option chain snapshot from 04 Nov 2025.
Step A: Market bias & horizon
Spot is 25,936.20. Price action and the option chain indicate a range-bound to mildly bearish bias for the week. Horizon: weekly expiry, so time decay matters but is manageable for intraday/swing entries.
Step B: OI clusters — Key levels
| Strike | Call OI (Lakh) | Put OI (Lakh) | Interpretation |
|---|---|---|---|
| 25,800 | 13.12 | 32.61 | Support forming |
| 25,900 | 24.96 | 27.47 | Balanced |
| 26,000 | 68.74 | 45.82 | Strong resistance / Max pain zone |
| 26,200 | 49.12 | 8.64 | Higher resistance |
Step C: IV & greeks context
Implied volatility in the snapshot is around 11.3–11.5% — a relatively calm market. That lowers option premiums and favors buyers who expect a directional move. Check Delta if you want directional exposure and Theta to manage time decay (weeklies show faster theta).
Step D: Selecting the premium — a clear rule
Use this simple, repeatable rule:
- If you expect consolidation: Trade ATM or 1‑strike ITM options to reduce probability of expiring worthless.
- If you expect a sharp directional move: Buy 1–3 strikes OTM for higher payoff (but smaller probability).
- Budget & risk: Keep max risk to a fixed percentage of capital (for example, 0.5–1% per trade).
- Confirmation: Enter only if price confirms bias near the OI level with supporting volume.
Trade Examples (based on 04 Nov snapshot)
Scenario A — Range Play (Conservative)
Spot: 25,936. If you expect the index to remain between 25,800–26,200, buy ATM 25,900–26,000 CE/PE depending on direction confirmation. Use tight SL (30–40% of premium) and close near resistance/support.
Scenario B — Bullish Breakout
If price breaks above 26,000 with volume and OI support, buy 26,000 CE (ATM). Target: 26,150–26,300. SL: below 25,900.
Scenario C — Bearish Rejection
If 26,000 rejects and price falls, buy 25,900 PE or sell 26,000 CE (covered/hedged). Target: 25,800–25,700. SL: above 26,050.
Key Takeaways
- Use a repeatable process: bias → horizon → IV → OI clusters → strike selection → risk rules.
- On 04 Nov 2025, 26,000 is the crucial level (both strong Call & Put OI).
- For calm IV, ATM options provide the best balance between probability & premium.
- Always trade with a plan: predefine SL, target and position size.
If you found this useful, visit Trend Spot Trader for more option chain breakdowns, daily trade ideas, and educational articles.
