Reading Options Flow
with an OI Sankey
A raw option chain is a wall of numbers. An OI Sankey turns it into one picture — calls vs puts, and exactly where the support and resistance walls sit. A condensed brief on how to read it.
A condensed summary of TradePulse's internal research. The OI Sankey is a TradePulse feature.
The distribution story
Open interest has a natural hierarchy: total OI → call OI vs put OI → where those contracts sit by moneyness. A Sankey diagram encodes quantity as link width, so it shows all of that in a single scan — the call/put split is a visual PCR, and the widest bands are the structural walls.
Call wall & put wall — the hedging mechanics
The biggest concentrations of OI act like walls because of dealer hedging:
- Call wall (resistance): dealers who sold the heaviest call strike hedge by selling the underlying as price rises toward it — mechanical selling that caps the move. The effect strengthens into expiry.
- Put wall (support): dealers who sold the heaviest put strike hedge by buying the underlying as price falls toward it — mechanical buying that cushions declines.
Max pain & dealer positioning
Max pain is the strike where option buyers collectively lose the most; price tends to gravitate toward it near expiry (a tendency, not a guarantee). The call/put balance also hints at dealer gamma: calls-heavy above spot often means dealers sell into rallies (mean-reverting, pinning); puts-heavy below spot can mean declines accelerate (trend-following, volatile).
Common misreadings to avoid
- "High put OI = market will fall." Often the opposite — those are hedges, and the dealers buy dips (support).
- "The widest band is where price goes." Wrong direction: the widest call band is resistance, the widest put band is support.
- "OI doesn't change intraday." It does — the picture is a snapshot at the last data fetch.
See the OI Sankey live
TradePulse renders this as an interactive OI Sankey with call/put walls and max pain marked — on the live option chain.