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option liquidity showing Volume and Open Interest

Open Interest: How it’s Calculated and Why it’s Important

When selling call and put options, the liquidity of these securities must be evaluated to determine their eligibility. There are two measures of investor interest in options, Vol(ume) and Open Interest (OI). Vol represents the number of times a particular contract is bought or sold in a particular day. Open interest, on the other hand, […]

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Option selling/ open interest and Volume

Option Liquidity: When Is Vol(ume) Greater Than Open Interest?

Check the options chain before selling a covered call or cash-secured put. In addition to determining the premiums and returns we will generate we also need to make sure the interest or liquidity in these options will be adequate enough for favorable trade executions. Below is a typical options chain showing both Vol(ume) and open interest (OI): […]

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