Volume — What's Trading TODAY
Volume tells you today's activity, OI tells you accumulated positioning. Reading them together is the key.
Volume = contracts traded today. OI = total outstanding contracts. Volume tells you what's flowing now. OI tells you where positions have accumulated over the contract's life.
Reading them together is the most powerful basic technique in option chain analysis.
Volume vs OI — the four combinations
High volume + low OI: active intraday trading, positions opening and closing same day. Speculation.
High volume + high OI: serious institutional flow building positions. Conviction.
Low volume + high OI: settled positioning, not actively being adjusted today. Stable.
Low volume + low OI: nothing happening. Skip unless waiting for catalyst.
Volume spikes as signals
When a specific strike sees volume 5x+ its 5-day average, something significant is happening at that strike. Institutional flow, news leak, or unusual positioning.
Strota's option chain highlights strikes with volume above 3x recent average — easy way to spot today's flow.
Common misreads
- Treating high volume as bullish or bearish on its own. Volume = activity, direction needs other signals.
- Ignoring OI change. Volume without OI change is just speculation, not positioning.
Key takeaways
- Volume = today. OI = cumulative.
- High volume + high OI = serious flow.
- Volume spikes 5x+ average signal flow concentration.
- Always read volume and OI together.
Volume reading
Is high volume always institutional?
Not necessarily. Retail flow can drive volume too, especially in OTM weeklies. Check OI change — institutional flow tends to build OI; retail intraday flow doesn't.
What's normal NIFTY ATM weekly volume?
Typically 5-20 lakh contracts on the most active strikes. Volume spikes to 50+ lakh on event days or before expiry.
Should I trade strikes with low volume?
Generally no — low volume means wide spreads and slow fills. Stick to strikes with reasonable daily turnover unless you have a specific reason.