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Open Interest is the total number of option (or futures) contracts at a given strike that are currently open — bought or sold, but not yet closed out. It's one of the most commonly checked numbers on an option chain, and a key input for gauging where the market expects a stock or index to gravitate.

Every options contract has two sides — a buyer and a seller. When a brand-new contract is created (a buyer and seller who didn't already hold offsetting positions), Open Interest goes up by one. When an existing position is closed out (the buyer sells back to someone looking to exit their short, or vice versa), Open Interest goes down by one. Trading the same already-open contract back and forth between different participants doesn't change Open Interest at all — it only counts contracts that are genuinely still open.

These two numbers sit side by side on every option chain and are easy to confuse:

• Volume counts how many contracts changed hands today, reset to zero every session — a rough measure of how actively a strike is being traded right now.
• Open Interest counts how many contracts are currently outstanding, carried forward from session to session — a measure of total positioning, not just today's activity.

A strike can have high volume with flat Open Interest (lots of existing positions simply trading hands between participants), or low volume with a large, stable Open Interest (a strike where most holders are just sitting on their positions). The two numbers answer different questions.

Combining the direction of price with the direction of Open Interest is a standard way traders read what's actually happening behind a price move — whether it's being driven by new positions or by existing ones being closed out:

The core idea: rising Open Interest means fresh positions are being added (someone is newly committing), while falling Open Interest means existing positions are being closed (someone is exiting) — combined with which way the price moved, that tells you which side is doing the committing or the exiting.

A hypothetical four-session sequence for the same strike, one row for each of the four categories above:

Each row's label follows directly from its own price-change and OI-change signs against the rule table above — Monday is price up + OI up (Long Buildup), Tuesday is price down + OI up (Short Buildup), Wednesday is price down + OI down (Long Unwinding), Thursday is price up + OI down (Short Covering).

A common practical use of Open Interest is spotting where it's unusually concentrated. Strikes with very high call OI are often watched as potential resistance — a large number of call sellers have effectively committed to selling at that level, creating a natural cap. Strikes with very high put OI are often watched as potential support, for the mirror reason — a large number of put sellers are committed to buying the underlying at that level if assigned. This is a market-sentiment heuristic, not a guarantee; OI concentration can and does shift as strikes are added or unwound.

• Liquidity check. A strike with very low Open Interest often has wide bid-ask spreads and can be hard to exit — worth checking before entering any multi-leg strategy on this site, especially ones with less commonly traded strikes.
• Strike selection for range-bound strategies. High OI concentration at specific strikes is sometimes used as a rough guide when choosing strikes for an Iron Condor or Short Strangle, on the idea that heavily-open strikes may act as informal support or resistance.
• Max Pain, a related concept calculated directly from Open Interest across all strikes, is covered on its own page.

• The four-way classification is a reading of aggregate flow, not a certainty. A "Long Buildup" reading means new positions on net are being added on the long side — it doesn't reveal any single trader's actual intent or conviction.
• OI concentration as support/resistance is a heuristic, not a rule. Large OI at a strike reflects existing positioning, not a guarantee the underlying will respect that level.
• OI updates typically lag slightly compared to live price and volume, since it reflects settled positions rather than every intraday trade.