Open Interest
Also called: OI, Open Interest (OI), open-interest, outstanding contracts, open contracts.
Formula
Open Interest counts each open contract once (one long matched with one short), so it is not the sum of buy and sell sides. Change in OI for a period = OI at end of period − OI at start of period.
How it is read
OI is commonly read next to price movement. It describes how positions are being built or unwound. There are four standard price-plus-OI combinations. Rising price with rising OI is termed a "long buildup". Fresh long positions are being added. Falling price with rising OI is termed a "short buildup". Fresh short positions are being added. Rising price with falling OI is termed "short covering". Existing shorts are closing out. Falling price with falling OI is termed "long unwinding". Existing longs are closing out. Traders also look at which strikes hold the most OI. That shows which levels carry large outstanding positions. Volume counts contracts traded in a period. OI counts contracts still open. So the two are generally read together rather than treated as the same thing.
What it does not tell you
OI tells you how many contracts are open. It does not tell you who is right. It does not tell you which way price will move next. The buildup labels describe what positions did. They do not describe what happens afterwards. Every open contract has a long and a matching short. That means OI alone does not reveal which side is "stronger". It does not reveal who initiated the trade. OI can shift sharply around expiry as contracts are settled or rolled to the next series. One instrument's OI is easy to misread without price, volume and the wider option chain beside it. Data is published on the exchange's reporting cadence. Intraday figures may therefore differ from end-of-day settled numbers.
See it in an experiment
Market X-Ray: Open Interest — Create, transfer and close example contracts. Compare open interest, volume and rollover arithmetic.
Change one input in Market X-Ray and watch what happens.
Market X-Ray: Option Chain — Which option-chain columns answer my question?
Related concepts
Open Interest vs Volume: Counting Contracts, Not Trades
Volume counts contracts traded in a period. Open interest counts contracts still outstanding. A ledger where ten trade and two stay open.
Open the lesson