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Option Volume & Open Interest | Options Trading For Beginners

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  • Опубликовано: 16 авг 2024
  • ➥ Hypergrowth Options Strategy Course: geni.us/option...
    Option volume and open interest are two liquidity metrics all options traders should pay attention to before entering a trade.
    Volume indicates the total number of option contracts that have traded on that day, while open interest represents the total number of open option contracts between two parties.
    In this video, you'll learn about the basics of option volume and open interest, as well as which options tend to have the most volume and open interest, making it easier for you to enter and exit positions. tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.

Комментарии • 48

  • @peteronuoha7073
    @peteronuoha7073 5 лет назад +5

    This is DEFINITELY THE BEST EXPLANATION of options contracts volume and interest !!! I finally get it !! :)

    • @projectfinance
      @projectfinance  5 лет назад +2

      Great to hear! Thanks for leaving a comment!
      -Chris

  • @KitkatTrading2024
    @KitkatTrading2024 3 года назад +3

    Should the OI be zero at 3:58 because now everyone has closed their positions and there is no open active position now? If you mean the net change is -5 then I guess the number should be 0 in the preceding slide (when B and C made the close and open trade)

  • @Mark-pd9qk
    @Mark-pd9qk 7 лет назад +15

    Finally someone who explains option basics that are understandable. Thanks for doing a great job!

    • @projectfinance
      @projectfinance  7 лет назад +1

      Mark, thank you so much for the kind feedback!
      I'm glad the explanations are understandable. That's the goal!
      -Chris

    • @figh761
      @figh761 2 года назад

      ​@@projectfinance how to see daily open interest chart of sp500 options.Where u get those charts

  • @cheddarbean91
    @cheddarbean91 3 года назад +1

    Extremely concise and helpful, appreciate the guidelines

  • @luismontiel6519
    @luismontiel6519 Год назад +1

    Thank you sir. You explain things so clear

  • @hunterpolvi4470
    @hunterpolvi4470 4 года назад +2

    No better option channel on RUclips

  • @yozy4996
    @yozy4996 6 месяцев назад

    Absolutely excellent Tutorial

  • @toniva6700
    @toniva6700 3 года назад +1

    What does buy 5 contracts to close mean

  • @sanbetski
    @sanbetski 3 года назад +1

    do you have video on unusual volume activity? thanks and more power!

  • @purpletruth4880
    @purpletruth4880 3 года назад +1

    Thank you very much for that great explanation!! You definitely know your stuff. 😊

    • @kellenantonio6134
      @kellenantonio6134 3 года назад

      I dont mean to be offtopic but does any of you know of a trick to log back into an Instagram account..?
      I somehow lost the account password. I would love any tricks you can give me.

  • @kmarquez6362
    @kmarquez6362 5 лет назад +3

    Thanks for the video!!
    Question: how do I know if the opent Int is a buy a call or sell a call?
    Assuming that I want to be where the big orders are and no against them. Thank you!!

    • @projectfinance
      @projectfinance  5 лет назад +3

      Hi,
      Since open interest accounts for all open contracts (which requires one person to buy and one person to sell), then open interest tells us the number of option contracts that people are long and short. For instance, if open interest is 1,000 for a call option, that means 1,000 people bought that option as an opening trade, and 1,000 people sold that option as an opening trade.
      I hope this helps.

  • @damiandaly7273
    @damiandaly7273 2 года назад

    thanks for the info

  • @tylerweitz3644
    @tylerweitz3644 Год назад

    I love your videos. Very helpful!

  • @amiraslam7955
    @amiraslam7955 4 года назад +1

    which charting platform you use to find out Volume in 100s and open interest in 1000's ?

  • @vivek2319
    @vivek2319 4 года назад +2

    08:22 Summary, thanks.

  • @tradeindiaimportexport9373
    @tradeindiaimportexport9373 Год назад

    where can i get change in open interest data from'

  • @ChaceBonanno
    @ChaceBonanno 4 года назад

    6:20 Very interesting. The liquidity's at the 5's

  • @chris-pw6jt
    @chris-pw6jt 4 года назад +1

    Hi, quick question about volume. Is it expressed in terms of "number of contracts" or "total dollar value of all contracts"? Ive heard you should always make sure there's about 40 times the volume of your position when you open a position, but that doesn't mean much unless i know which they're talking about.
    Great stuff, man!

    • @projectfinance
      @projectfinance  4 года назад

      Volume is the number of contracts / shares traded in a given day. I’m not sure where you heard that but it’s an interesting theory. Basically they’re saying if you trade 10 option contracts or 10 shares, the volume should be at least 4,000. In general, the more volume the better. If you stick to trading popular stocks and ETFs then you won’t have a problem

    • @chris-pw6jt
      @chris-pw6jt 4 года назад

      @@projectfinance OK. thanks for being timely with responses btw! one more question on the subject, when I see a volume of, for example, 1K (i.e. 1,000), should i interpret that as
      A) 1,000 individual contract, each representing 100 shares, or
      B)10 individual contracts, each representing 100 shares for a total of 1000 shares in volume?
      Im fairly certain the answer is A, but that would be a costlly mistake, so im confirming.
      Great stuff here, man!

    • @projectfinance
      @projectfinance  4 года назад

      It's A for option volume. Option volume has nothing to do with shares, only the number of option contracts that have traded that day. Share volume is the number of shares that have traded that day. They are separate and don't factor in the position's total value (such as share price x # of shares).

  • @guyredares
    @guyredares 5 лет назад

    very well explained.
    what I don't fully understand is when someone sells an option does it create a new contract or are they selling an existing one? the term 'options writing' sometimes replaces the term 'options selling', is there any difference between them?

    • @projectfinance
      @projectfinance  5 лет назад +2

      Hi Guy!
      When someone sells an option, somebody else has to buy it. There's a counterparty to every trade.
      To my knowledge, option selling and option writing are the exact same thing. There are lots of overlapping terms in options trading, which makes it quite confusing sometimes.

  • @novadolla7121
    @novadolla7121 4 года назад +1

    Are you referring to stock volume or options volume?

  • @anujgaonkar1055
    @anujgaonkar1055 Год назад

    Is there a way we can find out if open interest has increased or decreased since previous trading day ?

    • @projectfinance
      @projectfinance  Год назад

      I don't know of a trading platform that shows that metric

    • @anujgaonkar1055
      @anujgaonkar1055 Год назад

      @@projectfinance isn’t it an important metric to form bullish vs bearish view ?

    • @anujgaonkar1055
      @anujgaonkar1055 Год назад

      ??

  • @DarkPoolCash
    @DarkPoolCash 3 года назад

    What is open and close?

  • @nathanielsmith6065
    @nathanielsmith6065 4 года назад

    7:20 Can you explain what you mean when you say the 4DTE and 46DTE Options are the "standard monthly expiration cycles"? I am confused by that. What does that mean?

    • @Mrvikramhb
      @Mrvikramhb 3 года назад

      DTE days to expire

    • @nathanielsmith6065
      @nathanielsmith6065 3 года назад

      @@Mrvikramhb Sorry, my question wasn't clear. I knew what DTE means. I was confused by the "standard monthly expiration cycles" part. Though I'm not too sure anymore why. Looking back at the video I think he just meant most people tend to gravitate towards those DTE options if I'm not mistaken.
      I may have been overthinking what he was saying.

    • @Mrvikramhb
      @Mrvikramhb 3 года назад

      @@nathanielsmith6065 In our National Stock Exchange NSE (India - Nifty) option trading.. we have weekly option expiry with 4 days to expire (so 4 times each in a month) and 3 monthly options expiry (30 day, 60 day and 90 day).. all these open interest, PCR OI, PCR Volume makes sense for weekly option expiry than last day of a month expiry cycles. In India weekly expiry 4 DTE is very popular, Actually people play here like casino on the weekly expiry day.. if u have right skill u can make 3 or 4 times easily... however we lose most of the time due to fast theta decay.. but using this OI tool we can go against the time and play our game by buying option contract for the same day expiry at a much cheaper price and try our luck to exit on the fluctuation.

  • @rataflaca1
    @rataflaca1 4 года назад

    BUT IF OPEN INTEREST IS THE BALANCE OF LEFT CONTRACTS AND VOLUME JUST ADD ALL. THEN VOLUME SHOULD ALWAYS BE HIGHER THAN OPEN INTEREST ? WHY I SEE VOLUMEN MUCH LESS TAHN OPEN INTEREST IN MANY CASES?

    • @projectfinance
      @projectfinance  4 года назад +1

      Volume resets at 0 every day as it tracks the number of contracts today only. Open interest does not reset to 0, rather it adjusts to the new open interest level each day.

  • @rataflaca1
    @rataflaca1 4 года назад

    HOW CAN OPEN INTEREST BE HIGHER THAN VOLUMEN

  • @Jacob-pl3uc
    @Jacob-pl3uc 6 лет назад +1

    does volume and open interest decrease when the market is closed. iv looked everywhere online and cant find an answer

    • @projectfinance
      @projectfinance  6 лет назад +3

      Mike,
      Option volume will start at 0 and increase throughout the trading day as each respective option contract is traded. You should not observe option volume increasing after the market is closed since standard equity options stop trading at the market close.
      I believe open interest is only updated after each trading day (or only a couple times per day), but I could be wrong.
      I hope this helps!
      -Chris

  • @sharikacrenshaw4236
    @sharikacrenshaw4236 2 года назад +1

    ❤️❤️❤️