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To: FUZFO who wrote (35668)	2/21/1998 11:09:00 AM
From: username	Respond to of 61433

Fuzz: you got it. The open interest figure for a given option is the number of contracts outstanding at a given time. The open interest increases (you might say that an open interest is created) when trader A opens a new position by buying an option from trader B who did not previously hold a position in that option (B wrote the option, or in the lingo, was "short" the option). When trader A closes out the position by selling the option, the open interest will either remain the same or go down. If A sells to someone who did not have a position before, or was already long, the open interest does not change. If A sells to someone who had a short position, the open interest decreases by one. If you have not seen it, check out this site, it has a search feature: invest-faq.com

To: FUZFO who wrote (35668)	2/21/1998 4:08:00 PM
From: Glenn D. Rudolph	Respond to of 61433

does this mean that only the person who initiates the position (either by writing or buying the option) is the only one who can decrease the open interest that he/she has generated? Will, this is my understanding of OI, I believe you are half correct: x = total number of new contracts written y = number of contracts closed out by original writers OI = (x - y) FUZFO, This may sound a bit like semantics but the first sentence is truly accurate. No one can decrease the open interest that he/she has generated. Others may change open interest by increasing or decreasing contracts they generated but the contract you generate will always be open until you close it. The bookkeeping is such that the total open interest is tabulated as one number so your OI=(x-y) equation is the number one sees. Glenn