Open interest (OI) is the total number of options contracts that have been opened and not yet closed or expired at a given strike. Unlike volume - which resets every day - open interest accumulates and reflects how much positioning is genuinely parked in a contract.

Volume vs. open interest

If two traders open a brand-new contract between them, volume rises by one and open interest rises by one. If one of them later sells to close, volume rises again but open interest falls. So high volume with flat OI means contracts are being traded back and forth; rising OI means new positions are being built. The pair tells a richer story than either alone.

Why big OI at a strike matters

Large open interest concentrated at a strike is a magnet for attention because the parties on the other side - often market makers - must hedge that exposure. As price nears a heavily-populated strike, that hedging can influence how the stock trades around it, contributing to effects like pinning. It is one of the inputs behind gamma exposure.

Volume is the crowd today. Open interest is where the crowd is still standing.

Using it sensibly

Open interest is context, not a signal on its own. A wall of OI does not guarantee price will stall there - it tips the odds and shapes how dealers behave. Read it alongside support and resistance and the volatility regime, and it becomes one more layer in a structural read rather than a magic number.