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Why Do Option Traders Often Look at Strike Price Volume and Open Interest?

Volume and open interest at a strike indicate market sentiment, liquidity, and potential price support or resistance levels.
Greeks.Live20.11.25

Why Do Option Traders Often Look at Strike Price Volume and Open Interest?

Traders examine volume and open interest at specific strike prices to gauge market sentiment and potential support/resistance levels. Volume indicates the trading activity for that strike on a given day, showing immediate demand.

Open interest is the total number of outstanding contracts at a strike, providing insight into the total commitment of market participants. High open interest at a strike price can suggest that it is a critical price level where a large number of positions must be managed or closed, potentially acting as a magnet for the underlying price.

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