Hi Good Morning,

My understanding about OI is,

The number shows the buy and sell happen on that day. for instance,

OI=1,11,139. means buy=sell, that much contract closed.

Is OI indicate the following

high OI means more active, low OI less active. Should i go High OI in option stock market or it doesn’t matter?

In what way it helps the trade. what indication it gives about the particular stock or script?

Thanks in advance.

2 Comments
  1. EQSIS 7 years ago

    Open Interest in noting but number of open contract exist.

    For Equity – The share certificate is the Product, Which get transferred from one person to another person. Hence the open position remain same as long as there is no fresh issue / buy back of shares.

    But Derivative contract are different.

    Here New contract are created and exited based on the interest of traders.

    Hence the following are the 3 import factors which decide the number of open interest:
    • An open interest increases when there is new deal of buying and selling takes place along with the increasing volume.
    • An open interest decreases when the existing contract is closed by both the parties with decreasing volume
    • An open interest remains same and constant when the contact is transferred to the new party entering into contract but with change in volume.

  2. Author
    kishore 7 years ago

    oops, thank you so much sir. I was understanding wrongly these many day.
    now i understood. thanks you.

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