Open Interest (OI)
Open interest is the number of option contracts currently outstanding at a strike and expiration - positions opened but not yet closed, exercised, or expired. Unlike volume, which counts trading activity, open interest measures standing exposure, and its concentration across strikes is the raw material for wall, pin, and gamma estimates.
Volume resets every session; open interest carries over. A strike can print huge volume with no OI change (positions opened and closed intraday), or build OI steadily for weeks. OI is therefore the better measure of how much hedging obligation is anchored at each strike.
Concentrated OI is what creates structure: dealers hedging large open positions at a strike generate the flows that make call walls act as ceilings, put walls as cushions, and expiration pins possible. When those positions expire or are closed, the structure they created dissolves with them.
The trend of total chain OI is itself a regime signal. Growing OI during a rally suggests fresh positioning being established; contracting OI suggests positions rolling off without replacement - a thinning of the chain's structural memory that widens the distribution of possible outcomes.
Frequently asked
What is the difference between open interest and volume?
Volume counts how many contracts traded during the session and resets each day. Open interest counts how many contracts are still held open, so it carries over day to day and reflects standing exposure rather than activity.
Why does falling total open interest matter?
Falling open interest means positions are being closed and dealer hedges tied to them are unwinding, which thins the structure - the walls, pins, and gamma levels built from that open interest - and can loosen price.
Related terms
This term is part of a bigger picture: Gamma Exposure, Explained — the complete guide →