Open Interest
1. 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.
Investopedia Commentary
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:
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
Discovering Open Interest - Part 1
Discovering Open Interest - Part 2
Options Trading Volume And Open Interest
Using COT Report To Forecast FX Movements
See also: CME, Commitments of Traders Report - COT, Contract, Futures, Market Order, NYMEX, Options, Volume
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open interest
- The number of contracts for particular futures or an option which, at a given time, are outstanding. A large open interest indicates more activity and liquidity for the contract.
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