Open Interest
The total number of option contracts currently outstanding at a given strike.
Also called: oi
In plain language
Open interest counts contracts that exist and have not been closed or expired. It is distinct from volume, which counts contracts traded today.
Rising open interest with rising volume means new positions are being opened. Falling open interest means positions are being closed out.
Strikes with high open interest tend to have tighter spreads and better liquidity, which materially affects your fill quality.
Why it matters
Low open interest means wide spreads and difficulty exiting. On options, a bad exit fill can consume a large share of the intended profit.
Common mistakes
- Trading illiquid strikes and losing a significant portion of the edge to spread.
- Confusing open interest with volume when assessing activity.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
How easily an asset can be bought or sold without moving its price.
The gap between the bid and the ask — the built-in cost of entering a trade.
The number of shares, contracts or units traded during a period.
The price at which an option contract can be exercised.
The price paid for an options contract.