Open interest is the total number of derivative contracts that remain open at the end of a period.

Open interest is the total number of derivative contracts that remain open at the end of a period. It is a stock measure of outstanding positions. Volume is the number of contracts traded during a period. It is a flow measure of activity. Because one is a stock and the other is a flow, they are not interchangeable.

A stock measure describes how much exists at a point in time. A flow measure describes how much changed hands over an interval. In market analysis, that distinction matters because a high level of outstanding contracts and a high amount of trading are different observations. A market can have substantial activity over a session without implying a large outstanding base, and a large outstanding base does not by itself describe how much trading occurred during that session.

Metrics are defined by what they summarize and over what horizon they are computed. Different metrics capture different properties and should not be treated as substitutes.

For quantitative traders and market analysts, the practical lesson is conceptual. If a research design treats an outstanding-position measure and a trading-activity measure as equivalent, it risks mixing state and activity in the same signal interpretation. Open interest is therefore best understood as an outstanding-contract count, while volume is best understood as period trading activity.

Covered in depth in the Cross-venue market data & signals pillar hub.