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, OI 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 contracts traded during a session; open interest counts contracts still outstanding. High volume with flat OI means positions were opened and closed the same day.
Why does falling total open interest matter?
It means the chain's structural memory is thinning - fewer anchored positions, weaker walls and pins, and less hedging flow to dampen or define the range.
Related terms
This term is part of a bigger picture: Gamma Exposure, Explained — the complete guide →