What Is Open Interest in Options Trading?

Open interest in options trading is a critical tool that can be used to determine market sentiment on a particular stock, commodity or other underlying asset.

closeup of stock charts on tablet and PC
(Image credit: Getty Images)

There are many key factors investors must consider when it comes to options trading. One of the most important is the open interest of an option. But what is open interest in options trading?

Defined as the number of open call or put option contracts for a particular stock, open interest provides investors with a gauge of market sentiment. Here, we will take a closer look at the nuances of open interest and the impact they can have on investment decisions.

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Jared Hoffmann
Contributing Writer, Kiplinger.com

Jared Hoffmann is a highly respected financial content creator and options expert, holding a journalism degree from San Francisco State University. Formerly a Senior Options and Day Trading Editor and on-air personality at Money Morning, he excels in delivering comprehensive options education, technical analysis, and risk management education to traders.