Chapter 04 · Section 4.1
Open Interest- Definition 1
Which of the following is the best definition of the term open interest?
a) The total number of contracts sold during a day.
b) The total number of contracts bought during a day.
c) The total number of contracts outstanding at the time specified.
d) The total number of contracts that have been bought up to the time specified.
e) The total number of contracts that have been sold up to the time specified.
Open interest is the measure of a state. Volume is the measure of a flow.
Depending on whether a transaction is an opening or a closing transaction, open interest can increase or decrease like the balance in a bank account.