What this unit covers
Understand what open interest measures, the number of outstanding contracts, not direction, and why reading it alone as bullish or bearish is a common mistake.
By the end you will be able to
- Explain what open interest counts and how it differs from a directional signal.
- Describe why every open contract has opposing views built into it.
- Apply a pause-and-ask habit before reading direction into an open interest figure.
How it starts: Same Number, Two Strikes
- You check two option strikes on the same expiry.
- Both show 48,000 contracts still open, the exact same count.
- Weeks later one price has risen and the other has fallen.
Words you will meet
- Open Interest
- The count of option or futures contracts that are still open and have not been closed or expired.
- Option Chain
- A table listing every available strike price and expiry for an option, with data like open interest beside each.
In this module: Volatility & Option Chain
- Implied and Realised Volatility
- India VIX and Volatility Context
- Reading an Option Chain
- Open Interest Context and Its Limitations (this unit)
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