Difference between Volume and Open Interest in Derivatives.

Often traders get confused between Volume and Open Interest

We have already discussed what is Volumes and what is Open Interest 

Let us try to understand this via simple example.  

(if you are not able to see full image please click on image to enlarge) 

From this we can understand that there is no correlation between Volume & Open Interest. 

Let try to see via different examples. 

From above examples we expect reader must have got clear understanding on difference between Volume & Open Interest

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Please note this blog post is for education purpose only. While utmost care is taken while writing this post but any human error cant be ruled out and we apologize for same in advance.