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.

Read the full guide

DerivativesHow to Read Open InterestOpen interest is the number of open contracts. Six years of bitcoin, ether and solana say it doesn't point up or down, but it does warn of a rough week ahead.13 min readDerivativesHow to Read the Long/Short RatioThe long/short ratio counts accounts long against accounts short. Six years of it say the crowd is almost always long, and the number mostly restates yesterday.11 min readDerivativesHow to Read a Liquidation CascadeA liquidation cascade is forced selling that feeds on itself. Six years of data say most crashes aren't cascades, and the flush usually comes after the low.12 min read

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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