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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 75.19

-0.1%

Jan 16 9:30 AM EST

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To: TigerPaw who wrote (39674)	8/24/2000 10:08:09 PM
From: t2	Read Replies (1) of 77400

Does that mean that if you buy to open a put (counts as 1 open interest) and later sell that put to close is counts as two open interests? In this case volume traded would be 2 contracts and the open interest would be 1. It is only those that short the puts who generate additional open interest. In your scenario assuming the strike price just started trading today----we could trade the 1 contract among ourselves for 100 total trades. The volume would be 100 but the open interest will still be one. However, if i was a buyer from a market maker (or whoever) that does not hold puts (ie he will short them), that adds to the open interest. I believe it is the shorting of puts that gets added to the already existing short interest. In the case of Cisco Sept puts---I have not checked but it was posted that there is an open interest of 52000 contracts. The trading volume on tuesday was over 62000. The open interest was probably already there from before earnings (although I have not carefully tracked the OI). So what happened---basically the puts that were already out there got traded between different parties and no one was shorting them. That is how i understand it.

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