What is open interest?
Open interest (OI) is the number of option or futures contracts that are still outstanding: opened and not yet closed or expired. Each contract has a buyer and a seller, so open interest counts positions, not traders. It rises when new contracts are created and falls when existing ones are closed.
That makes it different from volume, which counts contracts traded during the session and resets every day. Volume shows where activity happened; open interest shows where positions have accumulated. A strike that trades heavily but does not add open interest was mostly intraday churn, while a strike that gains open interest on rising volume is seeing genuinely new positioning.
Why look at the trend, not just the total
An end-of-day open interest table tells you where positions sit. It does not tell you how they got there, or whether the pile at a strike is growing or being unwound right now. Trending OI plots open interest through the session for the strikes that matter, so you can see where call and put open interest is building up versus unwinding and how fast. That timing is often the useful part: a wall that forms in the first hour behaves differently from one that appears at 3 p.m.
On the live trending OI page, the overall trend chart, the CE versus PE flow view and the list of top trending strikes are all built from the same open interest snapshots. Intraday replay lets you step through the sequence instead of judging one frame.
The four buildup patterns
Long buildup
Price up · OI upNew positions are entering while price rises. In futures it is read as fresh buying; in options the meaning depends on whether it is a call or a put and on whether the option premium is rising or falling.
Short buildup
Price down · OI upNew positions are entering while price falls. In futures it is read as fresh selling. For an option, falling premium with rising open interest often points to writing on that side.
Short covering
Price up · OI downExisting shorts are closing while price rises. The move is driven by positions exiting rather than new ones entering, so the follow-through can fade once the covering ends.
Long unwinding
Price down · OI downExisting longs are closing while price falls. Pressure eases as open interest shrinks, so a decline driven by unwinding is different from one driven by new short positions.
| Price | Open interest | Pattern |
|---|---|---|
| Rising | Rising | Long buildup — new positions entering |
| Falling | Rising | Short buildup — new positions entering |
| Rising | Falling | Short covering — existing shorts closing |
| Falling | Falling | Long unwinding — existing longs closing |
In futures the price is the futures price. In options, apply the pattern to the option's own premium and the side (call or put) it is on, because a falling call premium and a falling put premium carry opposite meanings for the underlying. The participant wise OI guide applies the same four patterns to FII, DII, client and pro positioning.
Reading call and put OI trends together
- Locate the heavy strikes. Note where call open interest is largest above spot and where put open interest is largest below it. These are the zones traders watch as potential resistance and support.
- Check who is adding. A strike gaining open interest while its premium falls is often writing; gaining open interest while its premium rises is often buying. Neither is certain, since the tool cannot see the initiating side.
- Compare the two sides. Put open interest building below spot while call open interest is flat can indicate support forming; the mirror image suggests resistance forming.
- Watch for migration. Levels that shift toward spot, or away from it, tell you how the market's expectations are moving. A level that fades is less dependable than one that persists.
- Confirm with price and volume. An open interest signal that price does not respect is usually a weak one.
What the OI-volume-direction score summarises
The trending OI tool includes an OI-volume-direction ratio. It condenses open interest change, volume change and the underlying's move into one weighted, smoothed score so that the selected inputs can be read as leaning toward puts or toward calls. It is a summary of those inputs, not a probability of success, and a change in the score can be driven by any of them. Use it to prompt a closer look at the chart and replay, not to skip that step.
Limitations and common misreads
- Buyer and seller are invisible. A rise in open interest cannot tell you who initiated the trade, so “writing” and “buying” are inferences from premium behaviour.
- Hedges and spreads look directional. A protective put or one leg of a spread adds open interest without a matching market view.
- Snapshots lag. Open interest is updated at intervals, so very fast moves can be smoothed over.
- Expiry distorts the trend. Late in the cycle, falling open interest often means writers are closing out rather than the market changing its mind. See max pain for the settlement view.
- Size matters. Small changes at thinly traded strikes are noise; focus on the strikes that carry a large share of total open interest.