Open interest problem

A

arturo100

Sometimes, I observe some inconsistency in the option open interest (OI). For instance, recently the option PHM240830P00120000 had the following volumes and reported OI.

Date Vol OI
07/31/2024 2005 2038
08/01/2024 10 3638
08/02/2024 42 1638

How can be that the OI went from 3638 to 1638 on August 2 if only 10 options were exchanged on August 1? Alternatively, is it possible that the actual changes in the OI are reported only a few days later and not immediately the day after?
 
arturo100 said:
Sometimes, I observe some inconsistency in the option open interest (OI). For instance, recently the option PHM240830P00120000 had the following volumes and reported OI.

Date Vol OI
07/31/2024 2005 2038
08/01/2024 10 3638
08/02/2024 42 1638

How can be that the OI went from 3638 to 1638 on August 2 if only 10 options were exchanged on August 1? Alternatively, is it possible that the actual changes in the OI are reported only a few days later and not immediately the day after?
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Volume and Open Interest on options are two different things. Volume refers to the number of contracts transacted during the day. Open Interest refers to the number of open contracts available. That includes contracts transacted from previous days or even weeks.
 
smallfil said:
Volume and Open Interest on options are two different things. Volume refers to the number of contracts transacted during the day. Open Interest refers to the number of open contracts available. That includes contracts transacted from previous days or even weeks.
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That is also my understanding. So if on August 1 there were 3638 outstanding contacts, how come that the next day there are 2000 less outstanding contacts if only 10 options were exchanged the day before?
 
Don't quote me on this (not my area) that stock options can drop off OI by, naturally being offset or expiring but also if they are exercised.
 
SunTrader said:
Don't quote me on this (not my area) that stock options can drop off OI by, naturally being offset or expiring but also if they are exercised.
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Actually, your answer makes a lot of sense. I didn't consider this possibility. Thanks for sharing it. The only thing I don't understand now is why someone would exercise a PUT 120 when the underlying is quoted around 125.
 
arturo100 said:
That is also my understanding. So if on August 1 there were 3638 outstanding contacts, how come that the next day there are 2000 less outstanding contacts if only 10 options were exchanged the day before?
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The volume cannot be only 10. That would be impossible I think. More likely, the volume is far larger because 2000 contracts were sold based on your information. So, atleast 2000 contracts were sold the prior day.
 
smallfil said:
The volume cannot be only 10. That would be impossible I think. More likely, the volume is far larger because 2000 contracts were sold based on your information. So, atleast 2000 contracts were sold the prior day.
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I agree with you that something funny is going on, but then the question becomes: "Why two independent data vendors report that only 10 contracts were exchanged on Augusut 1 ?"
 
arturo100 said:
I agree with you that something funny is going on, but then the question becomes: "Why two independent data vendors report that only 10 contracts were exchanged on Augusut 1 ?"
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Maybe, not all the contracts have been settled and there is a delay in the reporting. Stock quotes, depending on the service, can be delayed as much as 30 minutes.
 
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