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To: Tom Trader who wrote (29234)	11/23/1997 4:28:00 PM
From: Heg Heg	Respond to of 58727

Hi Nancy & TT, open interest is simply the number of contracts that exist at the moment. For each contract there is a buyer (the 'long') and a seller or writer (the 'short'). So no netting there. The CP ratio measures simply the number of call contracts versus the number of put contracts. CP ratio as reported by CBOE is about contracts traded. This is only vaguely related to open interest: the same contracts can be traded again and again without neccessarily affecting the open interest (= number of contracts that exist). Think of open interest as the number of 'shares' that are in circulation. The difference to shares is that with shares only the issuing company can create new ones, while with option contracts anyone can create (=sell) (=write)(=go short) a new contract. Regards, heg