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What is the difference between open interest and volume?
Volume is the number of contracts traded during a session, and open interest is the number of contracts still outstanding after clearing. Volume starts again at zero each day and counts every trade. Open interest carries forward and changes only when trades add or retire contracts, or when contracts are exercised or expire. Volume measures today’s activity; the change in open interest measures net new positions.
The two can move in opposite directions. A busy session of closing trades raises volume and lowers open interest, so heavy volume alone does not show that traders are building new positions.
How each trade changes open interest and volume
Every trade adds its size to volume. Its effect on open interest depends on whether each side opens or closes a position.
- Both sides open: open interest rises by the trade size.
- One side opens and the other closes: an existing position changes hands, so open interest stays the same.
- Both sides close: open interest falls by the trade size.
Exercises and expirations also retire contracts and reduce open interest, but they are not trades, so they add nothing to volume. Volume updates with every trade. OCC calculates open interest through the clearing cycle, so the effect of today’s trades appears in the next published count. Both figures are published daily; Cboe’s market statistics list call, put and total volume and open interest by product group.
Open interest vs volume example
An XYZ 50 call series starts the session with 1,000 contracts of open interest, and three trades print. Each standard contract covers 100 shares.
| Trade | Contracts | Session Volume | Open Interest |
|---|---|---|---|
| Session Opens | 0 | 0 | 1,000 |
| Both Sides Open | 200 | 200 | 1,200 |
| Buyer Opens, Seller Closes | 300 | 500 | 1,200 |
| Both Sides Close | 100 | 600 | 1,100 |
Volume finishes at 600 contracts, which represent 60,000 underlying shares, but open interest rises a net 100, from 1,000 to 1,100. The 300-contract transfer added volume without adding a position, and the closing trade retired 100 contracts.
A larger session shows why the net change needs care. An XYZ 105 call series starts with 1,000 open contracts, trades 5,000 and finishes clearing with 1,300. Volume was five times the starting open interest, and net growth was 300 contracts, or 30%. Trading 2,650 contracts with both sides opening and 2,350 with both sides closing produces those totals. So does trading 300 contracts with both sides opening plus 4,700 transfers. Both sessions print identical totals, so read the 300-contract net growth as the floor on what opened that day.
How traders read open interest and volume together
Comparing the two measures turnover. Volume divided by prior open interest shows how much trading took place against the existing position base: 5,000 contracts against 1,000 is five times. Unusual options activity screens apply the same comparison to a single trade, where a 2,000-contract execution against 300 contracts of prior open interest is 6.67 times the base.
The next open-interest count then shows what the trading did. A rise means more contracts opened than were closed, exercised or expired; a fall means the reverse. Open interest by strike maps where positions sit, while volume shows where today’s trading concentrates. Direction comes from the call or put, the execution side and related legs, because every contract has a holder and a writer. Options flow lays out that activity by strike and expiration, with the side each trade filled on, so you read size and direction in one pass.
Bottom line
Volume tells you how much traded today; open interest tells you how many contracts remain open. Read volume against prior open interest to size the activity, then check the next open-interest count to see whether positions were added or removed. Take direction from the call or put, the execution side and the chart.
Common questions
Open Interest vs Volume: FAQ
- Can volume be higher than open interest?
- Yes. Volume counts every contract traded during the session, including trades that close or transfer existing positions, while open interest counts only contracts still outstanding. A series that starts with 1,000 open contracts can trade 5,000 in a session, five times its starting open interest, and still finish with only 1,300 open contracts after clearing.
- Does high volume mean open interest will rise?
- No. Volume rises with every trade, but open interest rises only when both sides of a trade open new positions. A session made mostly of closing trades can carry heavy volume and still shrink open interest. Read the next open-interest count to see whether positions were added or removed.
- Why does open interest update only once a day?
- OCC calculates open interest through the clearing cycle, combining the opening and closing designations of each trade with exercises and expirations. Trades made during the session therefore appear in the next published count. Volume updates with every trade, so intraday activity shows up in volume first.
- Do volume and open interest show whether traders are bullish?
- They show size, and direction comes from the trade itself. Every trade has a buyer and a seller, and every open contract has a holder and a writer, so read the call or put, the execution side, related legs and the price chart to judge direction, then use volume and open interest to measure the size of the activity and the position base.
- What does volume above open interest mean in options?
- It means more contracts traded in the session than were outstanding at the start of the day. The trades could have opened new positions, closed old ones or transferred existing ones. A 2,000-contract trade against 300 contracts of prior open interest is 6.67 times the position base, and the next open-interest count shows the net change in positions.
- Which matters more for liquidity, volume or open interest?
- A liquidity read needs both, plus the bid-ask spread. Volume shows how actively a contract trades and open interest shows how large the position base is, and both record past activity. The bid-ask spread and displayed size show what you can trade right now, so they are the last check before placing an order.