What does open interest mean in options Open interest in options is a significant concept that reflects the number of contracts for a specific option that have been initiated or created but have not yet been closed out by an offsetting trade, exercised, or expired. Here's a detailed explanation: 1. Definition: Open interest represents the total number of outstanding options contracts in the market. It includes contracts that have been bought or sold by traders but have not yet been matched by closing trades. 2. Uniqueness: Unlike trading volume, which counts the total number of contracts traded during a specific period, open interest measures the total number of contracts that are currently active and open. 3. Continuity: Open interest persists over time until the contracts are closed out through an offsetting transaction, exercised by the holder, or expire worthless. 4. Liquidity Indicator: High open interest typically indicates high liquidity in the options market for that pa