In simple words
Open interest (OI) is the total number of futures or options contracts that are still open, meaning nobody has closed or squared them off yet. Think of it as the number of “bets” currently running in the market. Volume tells you how many contracts traded today. Open interest tells you how many are still alive.
OI goes up when new buyers and new sellers enter and create new contracts. It goes down when traders close existing contracts.
Reading OI together with price
OI on its own does not say much. It becomes useful when you read it with price. Here are the four common combinations:
| Price | Open interest | Name | What it can suggest |
|---|---|---|---|
| Up | Up | Long buildup | Fresh buying; buyers are adding positions |
| Down | Up | Short buildup | Fresh selling; sellers are adding positions |
| Down | Down | Long unwinding | Buyers are exiting positions |
| Up | Down | Short covering | Sellers are closing positions |
Going a little deeper
In options, traders also study the option chain. A strike with very high call OI is often watched as possible resistance, because many traders have sold calls there. A strike with very high put OI is often watched as possible support. These are areas of interest, not guarantees; OI can shift quickly, especially close to expiry.
Common mistakes
- Using OI alone without looking at price and trend.
- Treating high OI levels as guaranteed support or resistance.
- Ignoring that OI changes through the day and near expiry.
- Trading without a stop-loss because “OI is supporting the trade”.
We cover this in detail in our Open Interest Analysis and Option Greeks & OCA courses.
For education only; not investment advice. Futures and options involve significant risk, including loss of capital. Read our Risk Disclosure.