Open Interest vs Volume

By Dennis Bosmans · Updated June 2026 · 3 min read · Risk disclaimer

Every option chain shows two activity numbers next to each contract: volume and open interest. They sound similar but measure different things, and reading them correctly tells you whether a contract is liquid enough to trade without giving up money on the spread.

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What each number measures

Volume is how many contracts changed hands during the current trading day. It resets to zero every morning. Open interest is the total number of contracts that are still open — created but not yet closed or expired — and it updates once per day.

A single trade can affect them differently. Volume always rises when a contract trades; open interest only rises when a new position is opened, and falls when positions are closed, so the two numbers tell a different part of the story.

How they work together

High open interest means a deep pool of existing positions, which usually translates into tighter bid-ask spreads and easier fills. High daily volume confirms the contract is active right now. Ideally you want both — a liquid contract that is also trading today.

A contract with high open interest but light volume can still be fine to trade; one with low open interest and low volume is a warning sign that you may pay a wide spread to get in and out.

Using them before you trade

Before entering, scan for strikes with healthy open interest and a tight bid-ask spread. Thin contracts force you to cross a wide spread, which is an immediate, hidden cost on every round trip.

Rising open interest alongside a price move can also hint that new money is backing the move, while falling open interest suggests positions are being unwound — context that complements, but never replaces, your own analysis.

Worked example. Two $100 calls expire the same day. Call A shows volume 5 and open interest 40, with a $1.00 / $1.40 market — a 40-cent spread on a thin contract. Call B shows volume 1,200 and open interest 9,000, with a $1.18 / $1.22 market. Call B is far cheaper to trade simply because it is more liquid.

Key takeaways

Volume = contracts traded today (resets daily); open interest = contracts still open (updates daily).
High open interest usually means tighter spreads and easier fills.
Look for both healthy open interest and active volume before trading.
Thin contracts cost you through a wide bid-ask spread on every trade.

Frequently asked questions

What is the difference between volume and open interest?

Volume counts the contracts traded during the current day and resets to zero each morning. Open interest counts all contracts that remain open and is updated once per day. Volume shows today’s activity; open interest shows the total outstanding positions.

Is high open interest good?

Generally yes — high open interest points to a liquid contract with tighter bid-ask spreads, which makes it cheaper and easier to enter and exit. It is one of the first things to check for liquidity.

Can open interest be higher than volume?

Yes, and it usually is. Open interest accumulates over many days, while volume only counts today’s trades, so an established contract typically has far more open interest than daily volume.

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