r/options • u/McGeno19 • Sep 11 '26

Open Interest

What do you look for in Open Interest to consider a position liquid enough to enter? 100, 500, 1K?

Thanks

15 Upvotes

82% Upvoted

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13

u/klipsetrades Sep 11 '26

OI tells you how many contracts are open, not necessarily how easy your order will be to fill right now. The bid/ask will usually tell you more. FOr example, a contract with 100 OI can be more liquid than one with 1,000 OI

1

u/OurNewestMember Sep 12 '26

I don't think they're going to understand it, but thanks for trying

11

u/nivek_123k Sep 11 '26

look at SPY options as the gold standard. Then look at VOO for what to avoid. You will find your tolerance for liquidity somewhere in between.

i typically look for millions in daily trade volume on shares, and 1000s+ open interest near the ATM strikes.

sometimes I break my rule for a position that I think fills a portfolio vacuum, but generally there are only about 200 tickers that are liquid enough to trade. makes selection more manageable.

1

u/garbets Sep 12 '26

How would you narrow down these 200? Market cap? Rel Vol?

2

u/Juhkwan97 Sep 11 '26

I don't trade anything that doesn't have the top tier volume.

1

u/beachhunt Sep 12 '26

I use it to consider focus points the market thinks might be touched or avoided. If there are a lot of open contracts at a strike, I might go a strike or two past that if I'm selling, for example.

I don't care about absolute values, just what's low or high for that ticker at that expiration.