Open Interest
Quick Definition
The total number of outstanding derivative contracts that have not been settled, closed, or expired, indicating market participation and liquidity.
What Is Open Interest?
Open interest represents the total number of active options or futures contracts that remain open — meaning they have not been exercised, closed out, or expired. Unlike volume (which counts all contracts traded in a day), open interest only changes when new contracts are created or existing ones are closed. When a buyer and seller both open new positions, open interest increases by one contract. When both close existing positions, it decreases by one. Open interest is a key indicator of market liquidity, trend strength, and potential support/resistance levels. Rising open interest alongside rising prices confirms a strong uptrend, while declining open interest during a rally suggests the move may be weakening. Options traders monitor open interest to identify strikes with heavy positioning, which can act as "magnets" near expiration.
Open Interest Example
- 1The AAPL $180 call has open interest of 50,000 contracts — this means 5,000,000 shares worth of call positions are currently active at that strike
- 2Open interest at the $450 SPY strike is 200,000 contracts. As expiration nears, market makers' hedging of this massive position can "pin" the stock near $450
Related Terms
Options Chain
A listing of all available option contracts for a security, organized by expiration date and strike price, showing prices, volume, and Greeks.
Futures Contract
A standardized exchange-traded agreement to buy or sell an asset at a predetermined price on a specific future date, with daily mark-to-market settlement.
Gamma Squeeze
A rapid price increase caused by market makers buying the underlying stock to delta-hedge their short call positions as prices rise and gamma amplifies.
Pin Risk
The risk that a stock closes exactly at or very near an option's strike price at expiration, creating uncertainty about whether the option will be exercised.
Expiration Date (Options)
The last date on which an option contract can be exercised or traded, after which it becomes worthless if not in the money.
Call Option
A contract giving the holder the right, but not the obligation, to buy an underlying asset at a specified price within a specified time period.
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