Option open interest

Option open interest is the number of option contracts that exist at a strike right now, free on any option chain. The strike above the price with the most call open interest tends to act as a ceiling and the one below with the most puts as a floor, because market makers hedging those contracts trade the stock. It belongs to the layer of what is already priced.

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In the help centreSee how leverage and margin work on Mochatrade
  • HedgingHedging is taking a second position that loses when your first one wins, to cut risk. Market makers hedge every fill…
  • Open interestOpen interest is the total size of all open positions in a contract, how much money is in the trade. Rising open…
  • Options contractAn options contract gives the buyer the right, not the obligation, to buy (call) or sell (put) at a strike before…
  • Put optionA put option is the right to sell at the strike before expiry, so it gains when the price falls: insurance on a…
  • Implied volatilityImplied volatility is the volatility an option's price implies, worked backward from the premium: the market's priced…
  • CPICPI, the consumer price index, is the monthly US measure of what a basket of goods and services costs households…

Educational content only. Not investment advice. Leveraged products magnify losses as well as gains.

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