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Technology Stocks : 3Com Corporation (COMS)
COMS 0.00130-18.8%Nov 7 11:47 AM EST

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To: Hua Xue who wrote (10549)11/20/1997 7:50:00 AM
From: santhosh mohan  Read Replies (1) of 45548
 
<<What does Open Interest actually mean?
People say if there is a seller, then there must be a buyer.
If Fred bought 5 contract at 2 3/4 and Joe sold 5 contract at 2 1/2(spread), what this trade will contribute to the open interest?>>

If Fred has established a new long position then the OI increases by 5. If the purchase is to close a prior short position, then the OI decreases by 5. The same applies to the other side of the trade, regardless of whether it is the MM or some other party. Hope this helps.
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