Open Interest

Loading the player...

What is 'Open Interest'

Open interest is the total number of options and/or futures contracts that are not closed or delivered on a particular day.

2. The number of buy market orders before the stock market opens.

BREAKING DOWN 'Open Interest'

1. A common misconception is that open interest is the same thing as volume of options and futures trades. This is not correct, as demonstrated in the following example:

Open Interest



-On January 1, A buys an option, which leaves an open interest and also creates trading volume of 1.
-On January 2, C and D create trading volume of 5 and there are also five more options left open.
-On January 3, A takes an offsetting position, open interest is reduced by 1 and trading volume is 1.
-On January 4, E simply replaces C and open interest does not change, trading volume increases by 5.

RELATED TERMS
  1. Volume Of Trade

    The total quantity of futures contracts bought and sold during ...
  2. Down Volume

    A stock volume that closes at a price lower than the previous ...
  3. Up Volume

    A stock volume that closes at a price higher than the previous ...
  4. Buy To Open

    A term used by many brokerages to represent the opening of a ...
  5. Option Class

    The set of all the call options or all the put options for a ...
  6. Volume

    The number of shares or contracts traded in a security or an ...
Related Articles
  1. Trading

    Options Trading: Volume And Open Interest

    Options traders should look at daily trading volume and open interest to find ideas they might otherwise overlook.
  2. Trading

    Options Trading Volume And Open Interest

    Learn how these two statistics can give you an edge in trading options.
  3. Trading

    Interpreting Volume For The Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume using open interest.
  4. Trading

    Using Open Interest To Find Bull/Bear Signals

    Volume should inform your use of this indicator in confirming trends and reversals.
  5. Trading

    How To Read The Market's Psychological State

    Discover what on-balance volume, accumulation/distribution and open interest can tell you about the market mood.
  6. Trading

    How To Use Volume To Improve Your Trading

    The basic guidelines to analyzing volume may not apply in all situations, but overall, they can help direct entry and exit decisions.
  7. Trading

    Introduction - Day Trading and Options

    Options have not been a tradition part of day-trading strategy, but this is quickly changing.
  8. Trading

    What The Market Open Tells You

    The first few moments of trading provide a lot of information. If a trader analyzes this information, it can give a lot of insight into the market's moves for the day.
  9. Investing

    Options on Futures

    Options on futures contracts offer another way for day traders to use options. These are traded on the same exchange as the underlying futures contract. Traders should take care to understand ...
  10. Trading

    How To Tackle Intraday Volume

    Measure the flow of intraday volume to estimate the emotional intensity of the crowd.
RELATED FAQS
  1. What is the difference between open interest and volume?

    Learn more about options, what options' volume and open interest are and the difference between volume and open interest ... Read Answer >>
  2. How do I measure option liquidity?

    An option is a financial instrument that gives the holder the right to purchase shares in a company at a certain set price ... Read Answer >>
  3. What does high open interest tell you about an option?

    Learn about the open interest of options contracts and what a high and a low open interest indicate about the liquidity of ... Read Answer >>
  4. What does a falling open interest on a stock signal?

    Learn what falling open interest on a stock signals. Open interest is like volume for options. It is considered a leading ... Read Answer >>
  5. What are the benefits of using open interest as an indicator?

    Find out more about the open interest of option contracts, what the open interest indicates and the benefits of monitoring ... Read Answer >>
  6. What does a rising open interest on a stock signal?

    Learn more about the open interest on stock options, what the open interest of calls and puts indicates, and what a rising ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center