Open Interest

Open interest

The total number of derivatives contracts traded that have not yet been liquidated either by an offsetting derivative transaction or by delivery. Related: Liquidation.

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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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Open Interest

1. The options or futures contracts that an investor has not closed and that have not matured or expired. For example, if an investor buys 10 futures contracts on Monday, and sells six on Wednesday, the investor has an open interest of four at the end of the trading day on Wednesday. It should not be confused with the trading volume for an option or futures contract.

2. The number of orders to buy a security made before the beginning of a trading day.

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Open interest. Open interest is a record of the total number of open contracts in any particular commodity or options market on any given day.

You have an open interest when you enter a futures or options contract. The contract remains open until it expires, requires delivery or settlement, or you close it by selling it or buying an offsetting contract.

Open interest is not the same thing as trading volume, which records how many contracts have been opened or closed on a particular day.

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Open Interest

What Does Open Interest Mean?

(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 entered before the stock market's open.

Investopedia explains Open Interest

(1) A common misconception is that open interest is the same thing as the volume of options and futures trades. This is not correct, as is shown in the following example:

Time	Trading Activity	Open Interest
Jan 1	A buys 1 option and B sells 1 option contract	1
Jan 2	C buys 5 options and D sells 5 options contracts	6
Jan 3	A sells his 1 option and D buys 1 options contract	5
Jan 4	E buys 5 options from C who sells 5 options contracts	5

On January 1, A buys an option, which leaves an open interest and also creates trading volume of 1. On January 2, C and D create a trading volume of 5, and there are also five more options left open. On January 3, A takes an offsetting position, open interest is reduced by 1, and trading volume is 1. On January 4, E simply replaces C, open interest does not change, and trading volume increases by 5.

Related Terms:
• Futures
• Index Futures
• Options
• Stock Option
• Volume