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Open Interest
What does it mean?
1. The total number of options 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.
In Other Words...
A common misconception is that open interest is the volume of options and futures trades. This is not correct, as demonstrated in the following example:
- On Jan 1 A buys an option which leaves an open interest and also creates trading volume of 1.
- On Jan 2 C and D create trading volume of 5 and there are also 5 more options left open.
- On Jan 3 A takes an offsetting position and therefore open interest is reduced by 1, and trading volume is 1.
- On Jan 4, E simply replaces C and therefore open interest does not change, trading volume increases by 5
Related Links
Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.
Related Terms
CME | Contract | Futures | Market Order | NYMEX | Options | Volume
1 |
A | B |
C | D |
E | F |
G | H |
I | J |
K | L |
M | N |
O | P |
Q | R |
S | T |
U | V |
W | X |
Y | Z
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