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Every option contract shows two numbers next to it — volume and open interest — and they get mixed up constantly. One tells you what happened today; the other tells you what's still standing. Get the difference and you can tell a fresh, conviction-sized bet apart from someone just day-trading a strike.
Volume is how many contracts traded during today's session — it resets to zero every morning. Open interest is how many contracts are still open (not yet closed or expired) — it updates once per day, after the close. Volume is today's activity; open interest is the total position built up over time. When volume runs higher than open interest, most of today's trading is opening brand-new positions — the classic fingerprint of unusual options flow.
Counts every contract that changes hands during the session. Starts at 0 each morning, ticks up live all day, and resets overnight. A flow of activity.
The running total of positions that have been opened and not yet closed or expired. Updates once a day after the close. A standing balance.
Think of a bathtub. Volume is the water pouring through the tap today — a rate. Open interest is the water sitting in the tub — a level. New buyers and sellers opening positions add to the tub; people closing positions drain it. A day can have huge volume (lots of water through the tap) while the tub barely rises, because just as many positions were closed as opened. That gap between "how much traded" and "how much the standing position changed" is the whole game.
On its own, big volume just means a strike was busy — it doesn't say whether traders were opening new bets or closing old ones. Open interest is the tell. Comparing today's volume to the change in open interest is how you separate real positioning from noise:
The $150 calls on a stock start the day with 2,000 open interest. Today 9,000 contracts trade. That's the headline "unusual activity" alert. But what actually happened depends on tomorrow's open-interest print:
| Scenario | Volume today | OI next day | What it means |
|---|---|---|---|
| New positioning | 9,000 | 10,500 | OI jumped ~8,500 — most of the volume opened new positions. A fresh bet. |
| Closing / churn | 9,000 | 2,200 | OI barely moved — traders mostly closed and re-opened. Day-trading, not conviction. |
Same eye-catching 9,000-contract volume, opposite stories. The one that matters — new positioning — is only confirmed when volume shows up and open interest rises with it. When volume > existing open interest, you already know a big share had to be new, because there weren't enough open contracts to close.
The combination of a rising or falling price with rising or falling open interest is a classic tape-reading grid. It won't hand you direction, but it tells you whether a move has fuel behind it:
| Price up · OI upNew money leaning long — the move is being backed by fresh positions. | Price up · OI downShort covering — shorts buying to close. Can fade once they're out. |
| Price down · OI upNew money leaning short — fresh bearish positions being built. | Price down · OI downLongs liquidating — positions closing out, not new selling. |
And two quick sanity rules that trip people up: high open interest means liquidity, not a direction — every open contract has a buyer and a seller. And open interest updates once a day (the OCC tallies it after the close), which is why you watch volume live all session but open interest only refreshes the next morning.
Volume is how many contracts traded during the current session — it starts at zero every morning and counts every trade that day. Open interest is how many contracts are still open (not yet closed or expired) and updates once per day, after the close. Volume measures today's activity; open interest measures the total standing position built up over time.
It means more contracts changed hands today than were open at the start of the day, so a large share of today's trading had to be opening brand-new positions rather than closing old ones. That's a common signal in unusual options flow that someone is putting on a fresh bet, not just trading in and out.
No. Open interest only tells you how many contracts are open, not which side is "right" or which way the position leans — every open contract has both a buyer and a seller. High open interest means liquidity and interest in that strike; it doesn't give you direction on its own.
Open interest is calculated by the clearinghouse (the OCC) after the market closes, once all of the day's trades are matched and it can tell how many positions were opened versus closed. That's why you see live volume tick up all session but open interest only refreshes the next morning.
We post unusual options flow in the free Discord and call out which prints are new positioning vs churn — before the trade, not after. 3,600 traders, wins and losses both on the board.