Strota / Open Interest — The Most Important Column

Open Interest — The Most Important Column

OI tells you where positions have built up over the option's life. The single most predictive column on the chain.

Open Interest = total outstanding contracts at a strike, not yet closed. Accumulates over the option's life; resets at expiry.

OI is the single most predictive column on the chain. Knowing where it's concentrated tells you where positions live — which translates directly to support and resistance levels.

Dominant OI strikes as price magnets

Strike with highest call OI = often resistance for the current expiry. Call writers defend that level.

Strike with highest put OI = often support for the current expiry. Put writers defend that level.

Together, these two strikes form the 'expected range' for the index until expiry.

Reading OI distribution

Concentrated OI (one strike has 3x the next strike): strong gravity. Index likely settles within that strike's range.

Spread OI (multiple strikes with similar OI): less directional. Wider expected range.

Both side OI heavy (high OI on both call and put sides): high-IV regime, large expected move priced in.

What to do with this: Mark the highest call OI and highest put OI strikes on every chain you check. These are your week's likely range boundaries. Trade strategies that profit if the index stays inside them (iron condor, short strangle) — or breakout strategies if you expect a breach.

Common misreads

Treating OI as a current-flow signal. It's cumulative; flow signal is OI change.
Reading total OI without normalising by strikes. Different strike spacings (NIFTY 50 vs BANK NIFTY 100) produce different OI distributions.

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Volume

OI Change

Key takeaways

OI = cumulative outstanding contracts.
Highest call OI strike = likely resistance.
Highest put OI strike = likely support.
OI doesn't reveal direction — but it reveals where the action is.

OI reading

Why does highest call OI act as resistance?

Because call writers (often institutional) have collected premium betting that the index stays below that strike. They have incentive to defend it. On expiry day, this gravity is real — BANK NIFTY pins within 100-200 points of dominant call OI strikes on 60-70% of Wednesdays.

Does OI reset on expiry?

Yes — each option contract expires worthless or settled. New OI builds for the next expiry from zero. Track each expiry's OI separately.

How is OI different from volume?

Volume = trades today (regardless of opening or closing positions). OI = currently open positions (closing trades reduce OI; opening trades increase it). Distinct concepts.

See OI distribution →