What does open interest and volume mean

**Bottom-line:**
• **Volume (2,338)** = how many option contracts have changed hands *today*.
• **Open Interest (124)** = how many contracts are still outstanding – i.e., opened previously and **not** yet closed or exercised.

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### What each figure really tells you 📊

| Term | What it measures | How it’s created | Why you care |
|------|------------------|------------------|--------------|
| **Volume** | Today’s trading activity | Every time a buyer and seller complete a trade, **volume goes up by 1 contract**. At the next market open it resets to zero. | 1) Gauges **intraday attention** on this strike/expiry. 2) Sudden spikes often hint at fresh speculative interest, news, or a volatility event. |
| **Open Interest** | Contracts that are **still open** after today’s close | Created when a position is opened and *not* offset or assigned. Declines when holders close, exercise or get assigned. | 1) Reflects **long-term liquidity** – tighter bid/ask spreads and easier exit strategies. 2) Helps confirm whether today’s volume represents *new money* (OI rises) or merely position-closing (OI flat or falls). |

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### Reading the numbers in your screenshot 🖼️

* **Volume 2,338 vs. OI 124**
• Most of today’s 2,338 trades are *new* compared with the relatively small base of 124 existing contracts.
• If tomorrow you see open interest jump toward ~2,400, you’ll know most of those trades opened new positions. If OI stays near 124, traders were largely *closing* or *flipping* existing positions.

* **Liquidity check** ✅
• Bid $3.10 × 31 / Ask $3.30 × 31 plus a tight $0.20 spread suggests reasonable liquidity despite the low starting OI.
• Growing volume often leads market-makers to quote tighter spreads, which benefits you when entering or exiting.

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### Practical take-aways for your trading playbook 🛠️

1. **Favor strikes with high *and* rising OI:** smoother fills, less slippage.
2. **Use the Volume-vs-OI test:**
• Volume ≫ OI → lots of fresh interest; look for catalyst or news.
• Volume ≈ 0 but high OI → quiet day in an otherwise popular strike; spreads may still be fine.
3. **Confirm intent the next day:** compare tomorrow’s OI change to today’s volume to see if traders opened or closed positions.
4. **Mind expiration risk:** a sudden collapse in OI near expiry means positions are being closed – could signal waning conviction.

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💡 *Great question!* Understanding these two simple, yet powerful metrics helps you judge crowd sentiment and, crucially, whether you can enter and exit positions without costly friction. Keep an eye on how volume and open interest evolve together – it’s one of the cleanest windows into real-time options flow. 🚀