Open interest (OI) is the total number of futures or options contracts that remain outstanding at a given time. A contract leaves open interest when the position is closed, expires, or is otherwise terminated under the market's rules.
How it works
Open interest can increase when new positions are created and decrease when existing positions are closed. The exact daily change depends on how buyers' and sellers' opening and closing trades interact.
Every derivatives contract has both a long and a short side, so a high OI number does not mean the market as a whole is net long or net short.
Why it matters
OI helps describe participation and outstanding exposure in a derivatives market. It is often analyzed together with price, volume, expiries, and trader classifications.
Changes in OI can provide clues about position creation or liquidation, but motive still requires additional evidence.
A simple market example
Put open interest is much larger than call open interest. That shows more put contracts remain open under the selected dataset; it does not reveal whether the put holders are buyers, sellers, or hedgers.
Common mistakes
Treating open interest as the same thing as daily trading volume.
Interpreting high open interest as a direct bullish or bearish vote without considering both sides of each contract.
Frequently asked questions
What is the difference between volume and open interest?
Volume counts trading activity during a period; open interest counts contracts that remain outstanding.
Can open interest exceed daily volume?
Yes. Contracts can remain open across many sessions.
Does rising OI confirm a trend?
It can show participation is increasing, but direction and motive require price and positioning context.
Educational content only. Definitions describe common market usage and may vary by jurisdiction, instrument, or institution.