{"id":35,"date":"2015-01-09T16:40:07","date_gmt":"2015-01-09T21:40:07","guid":{"rendered":"\/?p=35"},"modified":"2016-07-05T15:48:24","modified_gmt":"2016-07-05T19:48:24","slug":"volume-and-open-interest","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/learn\/options\/basics\/volume-and-open-interest\/","title":{"rendered":"09) Volume and Open Interest"},"content":{"rendered":"

In this lesson we\u2019re going to take a look at 2 related yet distinct elements of the options chain, Volume and Open Interest.<\/p>\n

Volume<\/b><\/h2>\n

The number shown under the \u201cvolume\u201d column of the option chain represents the total number of option contracts for a given call or put contract that have changed hands on the current trading day.<\/p>\n

If you personally bought and sold 10 contracts, you would create 20 volume<\/b>. \u00a010 volume<\/b> for the buy + 10 volume<\/b> for the sell.<\/p>\n

Whenever possible, try to trade contracts that have a greater daily volume than the amount of contracts you wish to purchase. \u00a0This usually makes for a better buy price and a better sell price.<\/p>\n

At the <\/b>start of each trading day, volume is reset to 0.<\/p>\n

Open Interest<\/b><\/h2>\n

The number under the Open Interest<\/b> column represents the total number of contracts being held by traders during the lifespan of a given option contract. \u00a0Each time contracts are purchased and not liquidated the Open Interest total will increase.<\/p>\n

If you were to buy 100 contracts today and not sell them, and then buy 100 additional contracts tomorrow and continue to hold them, you would increase the Open Interest by 200. (100 contracts + 100 contracts)<\/p>\n

Always try to trade contracts with a good amount of Open Interest. \u00a0I would recommend that the Open Interest be at least 10 times the amount of contracts you plan to purchase. \u00a0So, if you\u2019re buying 50 contracts, look for a contract with at least 500 Open Interest. \u00a0It is likely that this will help you to have your buy or sell order filled faster and at a fair price.<\/p>\n