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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Herman J. Matos who wrote (182)2/17/1997 8:02:00 PM
From: Rodney Lockhart   of 14162
 
Isn't open interest just the total number of contracts still outstanding?

If open interest increases, it means more new contracts were opened up that day than retired.

You can sell a perviously purchased option before expiration. These secondary trades increase volume but not the open interest.

Open interest decreases when an option writer closes his position.
(Usually by purchasing contracts in the marketplace.)

I don't get all the talk about buying or selling. Each transaction has a buyer and a seller.

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