Calculation and mechanics
Open interest is determined per strike and expiration after the close. When the buyer and the seller both open a new position, it rises by one contract. When both close an existing position, it falls by one. When one side opens a position while the other closes an existing one, open interest stays unchanged.
For an underlying, open interest can be summed across all strikes and expirations, separately for puts and calls or as a total. Because the official figure is usually updated only once a day, it is not an intraday measure.
Distinction
Option volume counts how many contracts were traded on a day, open interest how many contracts remain open. High volume with low open interest points to a high daily turnover on a comparatively small stock of open contracts. Volume and open interest alone do not reveal which share of the traded volume opened or closed positions.
The ratio of open puts to open calls is the put/call ratio by open interest. In futures analysis, the open interest of futures is additionally viewed as a percentile over, for example, three years.
Related terms
- Option Volume (Opt Vol, average daily option volume)
- Put/Call Ratio (P/C, put-call ratio)
- Expiration (Expiry)
- DTE (Days to Expiry)
- Implied Volatility (IV)
All market and analytical information is provided for educational and analytical purposes only and does not constitute investment advice or a trading recommendation.