Lesson 5 of 8 · 2 min
Open interest vs volume
Positions held vs contracts traded — and why both are needed.
Definition
- Volume — how many contracts traded today.
- Open interest (OI) — how many contracts are outstanding (opened and not yet closed). It's typically updated once a day, after the close.
Why the difference matters
- A big volume day at a strike doesn't mean new positions were opened — trades could be closing existing ones.
- OI shows where positions accumulate, but it's stale intraday.
- Large OI at a strike can matter for hedging as price approaches it, especially near expiration.
Key Insight
Volume is today's activity; OI is yesterday's inventory. Same-day expiry options (0DTE) can trade huge volume that never shows up in OI at all.
Trading implication
Be careful with dashboards that mix the two. Know whether a chart is showing positioning (OI) or activity (volume).
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