What Is Open Interest Change In Options. Open interest is computed for all outstanding option contracts for all expiration dates. Low open interest and low volume may be a sign of weak liquidity.
Simply put open interest is the number of option contracts that exist for a particular stock. High open interest and high volume is a sign of strong liquiditywhich is beneficial to options investors. A large volume on option contracts does not necessarily mean there is an increase in interest regarding a stock.
Volume also provides this information.
When analyzing changes in option volume volatility and volatility skew it is important to consider changes in open interest. If open interest were to suddenly spike for instance it might indicate investors belief in the. A large volume on option contracts does not necessarily mean there is an increase in interest regarding a stock. Its a number that shows the amount of currently open positions of options contracts.
