Open interest
Also known as: options open interest, OI
Open interest is the total number of options contracts for a specific strike and expiration that remain open, meaning they have not yet been closed out, exercised or expired. It measures how many positions exist, not how much trading happened today.
How it works
Every options contract has a buyer and a seller. Whether open interest changes depends on whether each side is opening or closing a position:
| Buyer | Seller | Change in open interest |
|---|---|---|
| Opening | Opening | Increases |
| Opening | Closing | Unchanged (position transferred) |
| Closing | Closing | Decreases |
Open interest is calculated by the Options Clearing Corporation and updated once a day, so the figure you see during the session reflects positions as of the prior day's close. Options volume, by contrast, updates in real time.
Why it matters for traders
- Liquidity. Strikes with large open interest usually have tighter bid-ask spreads and are easier to exit.
- Confirming new positioning. When today's volume in a strike far exceeds its open interest, at least some of that trading must be new positions. Traders check the next day's open interest to see if it actually rose.
- Expiration dynamics. Large open interest concentrated at a strike near the stock price can matter on expiration date, as dealer hedging around that level may pull the stock toward it.
Example
On Monday, Contoso Robotics (CTSO) $40 calls expiring next month have open interest of 1,200 contracts. During Tuesday's session, 9,500 contracts trade at that strike.
Because volume is nearly eight times open interest, much of it is likely new. Wednesday morning, open interest updates to 7,800, an increase of 6,600 contracts, which confirms most of Tuesday's trades opened new positions rather than closing old ones.
FAQ
What is the difference between volume and open interest?
Volume counts contracts traded during a session. Open interest counts contracts that are still open at the end of the day. A busy day of traders closing positions can have high volume and falling open interest.
Does high open interest mean the stock will go up?
No. Open interest shows how many positions exist, not which way they lean. Every open call has both a buyer and a seller.
Track it on Quantisnow
Related terms
Part of the Quantisnow financial glossary. For longer explainers, see the investing guides. Educational content, not investment advice.