What is Open Interest (OI)?

Open Interest (OI) refers to the total number of outstanding (open) derivative contracts held by investors, that have not been settled for a particular asset.

OI equals the total number of contracts either bought or sold, not the sum of both. If 2 traders (a new buyer and a new seller) enter a new position, OI increases by 1. And if an existing buyer sells his position to a new buyer, the OI will not change.

It is an indicator of whether the money flowing into the F&O market is increasing or decreasing. Thus, OI helps measure the level of trading activity in the F&O market.

An outstanding contract refers to an F&O contract that has not expired, been closed by a covering purchase or sale, or in the case of options, a contract that has not been exercised.

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