Dealer-Directional Open Interest (DDOI)

Dealer-directional open interest (DDOI) is open interest broken out by strike and signed according to which side of the trade dealers are estimated to hold, long or short, rather than reported as a single unsigned contract count. Where raw open interest only reports how many contracts exist at a strike, DDOI adds the estimated directional read that turns a contract count into a hedging-flow estimate.

Raw open interest is symmetric by construction: every outstanding contract has a long side and a short side, and the headline OI number does not say which side dealers occupy. DDOI applies the same dealer-side assumption used across every other positioning metric on this glossary to sign each strike's open interest, turning a neutral count into a directional estimate.

The typical assumption is that customer buy-to-open flow at a strike leaves dealers short that contract, while customer sell-to-open flow leaves dealers long it - so DDOI accumulates a running, signed estimate per strike that is refined as new flow, closes, and rollovers occur across sessions.

DDOI functions as a building block: once each contract's relevant Greek (delta or gamma) is applied to the signed open interest at a strike, the result feeds directly into the aggregate metrics - dealer gamma positioning, gamma exposure, and dealer delta exposure - that are typically reported at the whole-chain level. Reading DDOI directly shows exactly which individual strikes are driving those aggregate reads.

DDOI carries the same estimation caveats as every metric built on top of it: it is an inference about who holds which side of a position, not a confirmed fact, and different methodologies can disagree on the exact split at any given strike. It is most useful as a structural map of where positioning concentrates, not as a precise count.

Because DDOI is signed and reported strike by strike, it is typically visualized as a bar chart across the option chain, with bars above and below a zero line representing estimated dealer-long and dealer-short positioning at each strike. That per-strike shape is what analysts scan for concentration, gaps, and the specific strikes anchoring the walls and pins that show up in aggregate metrics.

DDOI at any given strike is not permanent. As options expire, roll to new strikes, or are closed out, the signed positioning estimated to sit there unwinds with them, which is why the DDOI picture can shift meaningfully around expirations even without any new customer flow - the same rollover dynamic that reshapes open interest more generally.

Because DDOI separates the call side from the put side at every strike before signing them, it also makes it possible to see whether a given strike's positioning is dominated by calls, puts, or a roughly balanced mix of both - detail that is compressed away once a strike's DDOI is combined into whole-chain aggregates like gamma exposure or dealer delta exposure.