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1. Abdul Shheed Peedikakani   I Like It. |Report Abuse|  Link|February 19, 2021 11:02:12 PMReply
how to calculate Change in OI, what is the difference between Volume and Change in OI.
I can see that Volume is greater than change in OI, Why?
please help.
1.1. Tusar Rout   I Like It. |Report Abuse|  Link|April 1, 2021 1:19:53 PM
When A (writer/seller) initiates an option contract and sells to B, the OI is increased to +1. But When B (just a buyer) sells the contract to another buyer- C, in this situation OI doesn't increase but the volume increases to +1. During all the transitions throughout the day/week (B --> C --> D --> E) only volume increases not the OI. Hence Volume is higher than OI. How does the OI increase? When another Writer/Seller AA initiates a fresh option contract and sells the option to BB, then OI increases +1 (Now total OI = 2).
How does the OI decrease? When the 1st writer/seller A buyback the contract from a user X to close/exercise the contract (rare cases for Big Guys/FII/DII), the IO decreses to -1 (Now total OI =1). Most of the options expire worthless which makes Option Sellers lead 66% winning chances (Limited Profit, Uncapped Risk), while option buyers lead to 33% winning rate (Limited Risk, Uncapped Profit).