Trading term

What is Open interest?

Open interest is the total number of option (or futures) contracts currently open — created but not yet closed or expired. Unlike volume (contracts traded today), open interest counts contracts that actually exist, making it a gauge of how much real, committed money sits at a strike.

Open interest rises when a new contract is opened (a buyer and seller both entering fresh) and falls when contracts are closed out. It's a running total, updated daily, of live positions. This makes it different from volume, which resets each day and counts every trade — including traders opening and closing on the same day. High open interest at a strike usually means better liquidity: tighter spreads and easier entry and exit, because more contracts (and counterparties) are live there.

Traders use open interest two ways. First, as a liquidity filter — strikes with high open interest are safer to trade. Second, as a positioning clue: unusually heavy open interest at a particular strike marks a level the market is watching, and clusters of open interest can act like magnets near expiration (the 'max pain' idea). Rising open interest alongside a price move confirms fresh money is backing it; falling open interest suggests positions are being unwound rather than opened.

Open interest by strike
$44$46$48$50$52$54$55$58$60Open interest (live contracts) by strikeheaviest positioning

Open interest is the count of live contracts. It clusters at key round-number strikes ($50, $55 here) — where the most committed money sits, and where liquidity is best.

For example

A $55 call trades 500 contracts today (volume) but has 8,000 open interest — thousands of live positions there, a liquid, closely-watched strike. A nearby $57 call trades 500 contracts too but shows only 200 open interest, so most of today's volume was traders opening and closing intraday.

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Why it matters to you

Open interest is the truest read on where real, committed money sits in the options market — the count of positions that actually exist, not just today's churn. It's both a practical liquidity filter and a window into where the market is positioned, which is why traders check it before entering any strike.

⚠ Don't confuse it with volume

The common mistake is treating high daily volume as the same as high open interest. Volume can be inflated by day-traders opening and closing the same contracts, vanishing by tomorrow. Open interest is the standing count of real positions. A strike with big volume but low open interest isn't necessarily liquid or committed — check both.

Frequently asked questions

What is open interest?

Open interest is the total number of option or futures contracts that are currently open — created and not yet closed or expired. It's a running daily count of live positions, showing how much committed money sits in a particular contract or strike.

What's the difference between open interest and volume?

Volume is the number of contracts traded during a session and resets each day; open interest is the standing total of contracts still open. Volume can be inflated by intraday round-trips, while open interest reflects positions that actually persist — a better gauge of real, committed interest.

Why does open interest matter for liquidity?

High open interest means many live contracts and counterparties at a strike, which usually produces tighter bid-ask spreads and easier entry and exit. Low open interest signals a thin market where you may overpay to trade. Traders use it as a filter to avoid illiquid strikes.

What does rising or falling open interest mean?

Rising open interest means new positions are being opened — fresh money entering, which can confirm a price move. Falling open interest means positions are being closed or unwound, suggesting a move is losing conviction or a trend is being exited rather than added to.

Related terms

Call optionA call option is a contract giving the buyer the right — but not the obligation — to buy an asset at a fixed 'strike' price before a set expiry date. Call buyers are betting the price will rise; their risk is capped at the premium paid, while the potential profit is open-ended.Cash-secured putA cash-secured put is an options strategy where you sell a put option while setting aside enough cash to buy the stock if you're assigned. You collect the premium as income; in exchange, you agree to buy the stock at the strike if it falls there. It's a way to get paid to buy a stock you want at a lower price.Covered callA covered call is an options strategy where you own 100 shares of a stock and sell a call option against them. You collect the premium as income; in exchange, you cap your upside at the strike. It's a popular way to generate income on shares you're happy to hold or sell.DeltaDelta measures how much an option's price moves for each $1 change in the underlying. A delta of 0.60 means the option gains about $0.60 if the stock rises $1. It ranges from 0 to 1 for calls (0 to −1 for puts) and doubles as a rough probability the option finishes in the money.
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