What is open interest and volume in options?

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Open interest (OI) and volume measure the activity or interest of traders in a particular option. It is also used by traders to ascertain liquidity in an option. Options with low volume and open interest will have low buyers or sellers and hence low liquidity.

Volume- It is the total number of contracts traded between buyers and sellers in the options market. It is calculated on daily basis. For example, say a buyer buys 10 lots of an option and a seller sells 10 lots of options. So the volume for that day will be 10.

Open Interest- It is the total number of contracts that are held by traders. It excludes exercised and expired contracts. For example, say 3 traders are holding 10 lots of contract. So the open interest for that day would be 30.

Here’s how to find out the volume and OI of an option?

You can know the volume and Open Interest of the desired Option by reading its options chain. Go to www.nseindia.com and search for the desired Option in the search bar available at home page. On the specific options page, click on the options chain.

volume_OI_1 Volume_OI
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