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What is the difference between open interest and volume?

Open interest can increase or decrease before expiration. The difference between open interest and volume can be confusing. As a stock trader, you only have a single measure of liquidity and activity: volume. Like stocks, options contract volume displays that day’s activity, whereasopen interest is the total number of contracts outstanding.

What does a rising price with increasing volume and open interest mean?

For example, a rising price with increasing volume and open interest indicates that the market for an option isstrong, while a rising price with decreasing volume and open interest suggests a weak market. What Does It Mean When the Volume Is Higher Than the Open Interest?

When is Vol greater than open interest?

A rare exception when Vol is greater than open interest is on the first day when contracts become the “front month” and new strike prices are created for that month. Many vendors will leave the open interest column at zero until the second day when reliable statistics can be gleaned from options chains.

What is open interest in options & futures?

Open interest is a metric that is unique to the options and futures markets. Unlike volume, open interest is a measure of the total number of open contracts for a given expiration date. While volume represents the total activity in a particular contract, open interest tells traders what type of activity it is.

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