A direct absorption solar collector converts solar energy into thermal energy and stores it directly in the working fluid. Usually, a nanofluid is used as the working fluid. This work aims to study the behavior of the collector with wide variations of constructional and operating conditions, and then to arrive at the optimum mean extinction coefficients of the nanofluid for obtaining maximum energy storage efficiency. Some studies on these issues with limited scopes are available in the literature. A generalized way of choosing an optimized mean extinction coefficient of the nanofluid for applications in a direct absorption solar collector is not available elsewhere.The parametric behavior of a direct absorption solar collector is studied through a transient finite difference model that considers radiation and convection heat losses from the top surface and mirror reflection from the bottom. Node-wise transient energy equations are developed in terms of the mean extinction coefficient of the working fluid. The optimized mean extinction coefficient points, corresponding to the maximum energy storage efficiency under one sun incident illumination, are identified over a large number of parametric computations. These data show that the optimum mean extinction coefficient decreases with fluid height and illumination time. Correlations for optimum mean extinction coefficient as functions of fluid height and illumination time are derived through regression analyses over the maxima points. A simplified time-averaged correlation solely as a function of fluid height is also presented. In addition, an average optical thickness, a product of the fluid height and optimum mean extinction coefficient, of 2.35 is recommended while using a fluid height between 20 and 80 mm. It is expected that this work would enable one not only to understand the parametric behavior of the collector but also to design it optimally.