Open Interest

Open interest represents the total number of option contracts that are currently outstanding — meaning they have been opened but not yet closed, exercised, or expired. Unlike volume, which resets to zero each day, open interest is a cumulative measure that changes only when new contracts are created or existing contracts are closed. It is reported by the Options Clearing Corporation (OCC) with a one-day delay.

The relationship between volume and open interest provides important context for understanding market activity. High volume with increasing OI means new positions are being established — traders have conviction and are committing capital. High volume with flat or declining OI means existing positions are being closed — traders are taking profits or cutting losses. This distinction is critical because the two scenarios have very different implications for future price movement.

Open interest also plays a role in options market mechanics. Large concentrations of OI at specific strikes can create "pinning" effects near expiration, where market maker hedging activity tends to pull the stock price toward the strike with the highest OI (known as max pain). Options Pilot tracks OI changes across the Activity and Sentiment pillars, monitoring 5-day OI build-up, OI skew between calls and puts, and OI concentration at specific strikes to provide a complete picture of how the options market is positioned.