Open Interest Change

## What open interest measures Open interest (OI) is the total number of derivative contracts that are still open — not yet squared off or expired. Change in OI is simply today's OI minus yesterday's. Because every contract has a buyer and a seller, OI counts each contract once and tells you how much *new* money is committed, as distinct from volume, which counts every trade including the same contract changing hands repeatedly.

## Reading it with price Traders combine OI change with price direction to judge conviction:

- Price up + OI up = long buildup (fresh buyers, bullish). - Price down + OI up = short buildup (fresh sellers, bearish). - Price up + OI down = short covering (sellers exiting, often a bounce). - Price down + OI down = long unwinding (longs booking out).

This four-quadrant framework is staple analysis on Indian F&O desks for Nifty, Bank Nifty and single stocks.

## How Indian traders use it The NSE publishes OI and OI change live, and brokers surface it in option chains. Around weekly and monthly expiry, option OI is watched closely: heavy OI at a call strike marks a likely resistance, heavy OI at a put strike marks support, and the max-pain level is derived from where total OI would cause the most options to expire worthless. Aggregate F&O OI is also tracked because SEBI's market-wide position limits and ban-period rules kick in when a stock's OI crosses 95% of the permitted limit.

A caution: OI change is a clue, not a verdict. It tells you positions are being added but not always by whom or why, and rolls near expiry can distort the day-to-day reading. Use it alongside price action and the rollover data the exchange publishes near month-end.