Definition
Open Interest vs Volume
Volume counts contracts traded in a period, while open interest counts the total contracts still outstanding and not yet closed.
Volume resets each day and measures activity — how many contracts changed hands. Open interest is a running tally of all open positions that have not been squared off or expired, so it reflects the depth of commitment in a contract. A trade can add to volume while leaving OI unchanged if it merely transfers an existing position.
Indian F&O traders read the two together: rising volume with rising OI signals fresh, committed positioning, whereas high volume with flat or falling OI suggests churn or position-closing. Both are essential to interpreting strength behind a move on Nifty, Bank Nifty, or stocks.
Related terms
- Open InterestOpen interest is the total number of outstanding futures or options contracts that have not yet been closed.
- Long Build-upA long build-up is when both price and open interest rise together, signalling fresh buying and bullish positioning.
- Open Interest AnalysisOpen interest analysis studies changes in outstanding F&O contracts to gauge where support, resistance, and positioning lie.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.