The number of active contracts is called open interest, or OI. Most option quotation screens display this field along with the bid price, ask price, volume, and implied volatility. Most options traders ignore active contracts, which can have unintended consequences. The number of option contracts currently available is called the open interest. Traded contracts that have not been liquidated by an offsetting transaction, exercise, or assignment.
Understanding the significance of open interest in option and futures trading will help you decide what to buy and sell in the derivatives market. Hopefully this helped them grasp the fundamentals of futures trading. Our website offers additional training guides for more enlightening information on the F & O derivatives market before they begin trading.

Open interest is a key concept in futures and options trading. It refers to the total number of outstanding contracts that have not yet been settled or closed. Unlike trading volume, which measures the number of contracts traded within a specific period, open interest shows how many contracts remain active in the market. When open interest increases, it signals that new money is entering the market, often strengthening the current trend. Conversely, a decrease suggests positions are being closed, which may indicate a weakening trend. Traders and analysts use open interest along with price movements and volume to gauge market sentiment and potential reversals. It serves as an important tool for understanding liquidity and the strength of price trends.