What it really means
If volume is today’s traffic, open interest is how many cars are still parked in the market afterward.
Positioning
Open Interest
Open interest tells you how many option contracts are currently open and not yet closed.
In one line Open interest shows live positioning, not just today’s activity.
Positioning
Where contracts are stacked.
Open interest is most useful when you compare strikes, spot price, and change in OI together.
Quick example
Large call OI above spot can suggest an area where traders are heavily positioned, often discussed as a call wall.
Why traders care
- It helps identify crowded strikes and possible support or resistance zones.
- It gives context to price action when combined with volume and IV.
- It powers concepts like call walls, put walls, and positioning maps.
What beginners get wrong
- Confusing open interest with today’s traded volume.
- Assuming high OI alone gives a directional signal.
- Ignoring whether OI is increasing or decreasing alongside price.
Test Yourself
Quick Quiz
See how well you understand the term before moving on.
1 Open interest of 5,000 at a strike means:
2 What is the difference between volume and open interest?
3 Heavy call OI concentrated at one strike above spot is often interpreted as: