What is open interest in options?
Open interest is the total number of option contracts in a strike that are still open and not yet squared off or settled. It counts positions, not trades. Rising open interest means fresh contracts are being created and new money is entering that strike; falling open interest means existing positions are being closed out.
How do I read the option chain to find support and resistance?
Look for the strikes carrying the largest put and call open interest around the current spot. The heaviest put strike below spot is commonly treated as a support reference and the heaviest call strike above spot as resistance. Then watch change in open interest through the session — a level being defended will keep adding open interest, while a level about to break usually sheds it.
What does change in open interest tell me that open interest alone does not?
Change in open interest shows what is happening today, while standing open interest shows what was already there. A strike can hold a very large position built up over weeks yet see no fresh activity, and another can be quiet in absolute terms but adding aggressively right now. Reading both together separates old positioning from live intent.
What is the difference between open interest and volume?
Volume counts every contract traded during the session and resets to zero the next day, while open interest counts contracts still outstanding and carries forward until they are closed or expire. High volume with rising open interest points to fresh positioning; high volume with falling open interest points to existing positions being unwound.
Why do call and put implied volatility differ at the same strike?
Implied volatility is set by supply and demand for each contract separately, so the same strike can price its call and its put differently. Persistent gaps usually reflect directional demand — heavier put buying lifts put implied volatility, producing the downside skew commonly seen in index options. Watching the gap widen or narrow is itself a read on positioning.
