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Glossary — Open InterestPublished March 26, 2026Updated March 26, 2026beginner
Open Interest
Open interest shows how many option contracts are still open, which helps traders judge participation and liquidity.
#options#liquidity#open interest
Open interest measures how many contracts are still open. It is different from volume, which only tells you how many contracts traded during the session.
Why traders care
Low open interest can lead to wider spreads and worse fills. High open interest often signals a cleaner market.
What beginners get wrong
They treat volume alone as proof that a contract is tradable. A spike in volume can happen in a contract that still has poor open interest and messy execution.
Practical takeaway
Use open interest alongside volume and bid-ask spread. One number is not enough.