The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. Today, we are answering the question, “How can options have traded volume, but no open interest?” This one is one that I think really trips people up and sometimes I even have to slow down and think about this when I see this because it catches you off guard when you see this and it’s not oftentimes in highly liquid securities. It’s more often in underlyings and securities that are thinly traded or have low liquidity. But you might be looking at your options pricing table and you see that there’s some volume for those contracts, but no open interest and this could be really the cause of one or two different things. That’s really what I want to talk about here today. The first thing you have to understand about open interest is that it really is just this running account of contracts that are still open in the market. If for instance, somebody buys to open or sells to open a contract in the open market, then open interest goes up