Options markets are driven not only by price but by participation. Trading volume and open interest quantify how much activity exists in a contract and how that activity is distributed across time. Together, they provide a structural view of liquidity, execution quality, and the informational content behind price movements.
Trading volume measures the number of option contracts exchanged during a specific period, typically a single trading day. Each transaction contributes equally to volume regardless of whether it opens or closes a position. Volume is therefore a real-time gauge of current interest and immediacy in a given strike and expiration.
Open interest represents the total number of outstanding option contracts that remain open at the end of a trading session. A contract is counted in open interest only if it has been opened and not yet offset or exercised. Unlike volume, open interest accumulates or declines over time and reflects the level of committed capital in that contract.
Liquidity and Market Function
Liquidity refers to the ability to transact without materially affecting price. Options with consistently high volume and open interest tend to support tighter bid-ask spreads, meaning the difference between the best available buy and sell prices is smaller. Narrow spreads reduce transaction costs and slippage, improving execution reliability.
Low-volume or low-open-interest contracts often exhibit wider bid-ask spreads and sporadic quoting. Market makers demand greater compensation for providing liquidity when participation is thin. For traders, this can translate into higher implicit costs and difficulty entering or exiting positions at expected prices.
How Volume and Open Interest Differ in Information Content
Volume is a short-term indicator of activity intensity. A spike in volume signals heightened engagement, often linked to news, volatility changes, or speculative positioning. However, volume alone does not indicate whether new risk is being added or existing positions are being unwound.
Open interest provides context by showing whether activity is building or dissipating. Rising open interest indicates that new positions are being established, increasing total exposure in the market. Declining open interest suggests positions are being closed, reducing aggregate risk.
Interpreting Volume and Open Interest Together
When volume increases alongside rising open interest, market participation is expanding and new positions are reinforcing the prevailing price action. This combination often reflects stronger conviction, as traders are committing additional capital rather than merely trading in and out. Price movements under these conditions tend to be more structurally supported.
High volume accompanied by falling open interest indicates that activity is dominated by position closures. In this case, price changes may reflect short-term adjustments rather than durable shifts in expectations. Without growth in open interest, the informational value of price moves is generally weaker.
Implications for Trade Execution and Risk Assessment
Contracts with substantial open interest across multiple expirations typically attract continuous market-making activity. This depth improves fill quality and reduces the likelihood of adverse price movement during execution. For multi-leg strategies, such as spreads, sufficient open interest across legs is essential to avoid execution imbalance.
Volume and open interest also influence the reliability of observed prices. Option premiums in illiquid contracts may appear attractive but can be distorted by sparse trading. Evaluating both metrics helps distinguish between prices formed through active competition and those shaped by limited participation.
Defining the Metrics: What Trading Volume and Open Interest Actually Measure
Understanding how volume and open interest are constructed is essential before drawing conclusions from them. Although both metrics describe market activity, they capture fundamentally different dimensions of participation. One reflects trading intensity over time, while the other reflects the accumulation of outstanding risk.
Trading Volume: Measuring Transactional Activity
Trading volume in options represents the total number of contracts traded during a specific period, most commonly a single trading day. Each completed transaction contributes to volume, regardless of whether it opens a new position or closes an existing one. As a result, volume is a flow variable, measuring activity over time rather than a standing level of exposure.
Volume resets at the start of each trading session and does not carry forward. High volume indicates that market participants are actively transacting, often in response to price movement, changes in implied volatility (the market’s expectation of future volatility embedded in option prices), or new information. However, volume alone does not reveal whether traders are increasing or reducing their net positions.
Open Interest: Measuring Outstanding Exposure
Open interest represents the total number of option contracts that remain open and have not been closed or expired. Each contract contributes to open interest only when a new buyer and a new seller initiate a position. When an existing holder exits and the counterparty closes the position, open interest declines.
Unlike volume, open interest is a stock variable that persists across trading sessions. It changes only when new positions are created or existing ones are eliminated. This makes open interest a direct measure of how much capital and risk are currently committed to a given strike price and expiration.
Why Volume and Open Interest Are Not Redundant
Although both metrics relate to activity, they answer different questions. Volume answers how much trading occurred, while open interest answers how much risk remains in the market. A contract can trade heavily without any change in open interest if buyers and sellers are primarily unwinding existing positions.
Conversely, open interest can rise even on moderate volume if trades are consistently opening new positions. This distinction is critical for interpreting whether observed price movements are driven by short-term turnover or by sustained positioning. Treating volume and open interest as interchangeable obscures this structural difference.
What Each Metric Signals on Its Own
Viewed in isolation, volume is most informative about immediacy and liquidity. Higher volume generally corresponds to tighter bid-ask spreads, faster execution, and greater confidence that quoted prices reflect competitive market consensus. Low volume raises the risk that prices are stale or influenced by a small number of participants.
Open interest, by contrast, provides insight into market commitment. High open interest at a given strike and expiration suggests that many participants have an ongoing economic stake in that contract. This concentration of exposure often attracts liquidity providers and increases the relevance of that option level in price discovery.
Why These Metrics Matter for Options Traders
Options derive much of their practical tradability from secondary market liquidity rather than theoretical value. Volume influences how efficiently a position can be entered or exited, while open interest influences how durable and informative observed prices are. Together, they help distinguish between contracts that are actively negotiated and those that trade sporadically.
Interpreting volume and open interest correctly allows traders to assess whether price changes reflect broad participation or isolated transactions. This distinction underpins more accurate evaluation of execution risk, bid-ask behavior, and the strength of market conviction embedded in option prices.
How Volume and Open Interest Differ — And Why Traders Confuse Them
Although volume and open interest are displayed side by side on most options chains, they answer fundamentally different questions. Volume measures activity that occurred during a specific trading session, while open interest measures positions that remain outstanding after trades settle. One reflects short-term transaction flow; the other reflects accumulated exposure.
The confusion arises because both metrics increase when trading occurs, but for different structural reasons. Without understanding how options positions are created and closed, traders often assume that higher numbers always imply stronger demand or interest. This assumption overlooks how options transactions are matched and cleared.
Trading Volume: A Measure of Transactional Activity
Options volume represents the total number of contracts traded during a given period, typically a single trading day. Each contract traded counts once, regardless of whether it opens a new position or closes an existing one. Volume resets to zero at the start of each session.
Because volume captures immediacy, it is most relevant for assessing liquidity and execution quality. Higher volume generally corresponds to narrower bid-ask spreads and greater confidence that trades can be executed near quoted prices. However, volume alone provides no information about whether market participants are increasing or reducing their overall exposure.
Open Interest: A Measure of Outstanding Risk
Open interest represents the total number of option contracts that remain open and have not been offset or expired. It changes only when a trade results in the creation of a new position or the elimination of an existing one. Open interest carries forward from day to day until positions are closed.
This metric reflects how much capital and risk are currently committed to a specific strike and expiration. High open interest indicates that many participants have ongoing economic exposure, which often makes that contract more relevant to market makers, hedgers, and price discovery. Unlike volume, open interest evolves slowly and signals persistence rather than immediacy.
How the Same Trade Affects Volume and Open Interest Differently
Every options trade increases volume, but open interest changes only under specific conditions. When both parties to a trade are opening new positions, open interest increases. When both are closing existing positions, open interest decreases.
If one participant opens a position while the other closes one, volume increases but open interest remains unchanged. This mechanism explains why heavy trading activity can occur without any change in open interest and why open interest can rise on relatively modest volume. The distinction is mechanical, not interpretive.
Why Traders Commonly Misinterpret These Metrics
Many traders assume that high volume automatically signals growing interest or conviction. In reality, high volume may simply reflect rapid turnover as existing positions are unwound or rolled. Without open interest confirmation, volume-driven conclusions about market direction are often overstated.
Similarly, rising open interest is sometimes interpreted as bullish or bearish intent without context. Open interest reflects the presence of positions, not their directional bias, which depends on whether contracts were bought or sold and how they are hedged. Confusing exposure with sentiment leads to incomplete analysis.
Why the Distinction Matters in Practice
Understanding how volume and open interest differ improves interpretation of liquidity and execution risk. High volume with low open interest often indicates short-term trading interest but limited structural commitment. High open interest with steady volume suggests entrenched positioning that may influence pricing behavior over time.
Evaluating both metrics together allows traders to distinguish between transient activity and durable exposure. This distinction is essential for assessing whether observed price movements are driven by temporary flow or by sustained market positioning embedded in the options market structure.
Liquidity, Bid-Ask Spreads, and Execution Quality: Why These Metrics Matter Before You Click Trade
The mechanical distinction between volume and open interest becomes operationally important when evaluating liquidity and execution risk. Liquidity refers to the ability to enter or exit a position at or near the quoted price without materially affecting the market. In options markets, liquidity is uneven across strikes and expirations, making volume and open interest essential diagnostics rather than background statistics.
How Volume and Open Interest Signal Practical Liquidity
Trading volume measures how many contracts change hands during a given session, while open interest measures how many contracts remain outstanding. High daily volume indicates active trading flow, whereas high open interest indicates a deep pool of existing positions. Liquid options typically exhibit both, but the balance between them matters.
High volume with low open interest often reflects short-term trading or hedging activity that may not persist. This can create the illusion of liquidity that disappears quickly once the immediate flow subsides. In contrast, high open interest provides structural liquidity because many participants already hold positions and are more likely to transact around those strikes.
Bid-Ask Spreads as a Cost of Liquidity
The bid-ask spread is the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. This spread represents an implicit transaction cost paid by traders and compensation for liquidity providers, such as market makers, who assume inventory and volatility risk. Wider spreads increase trading costs and reduce execution efficiency.
Options with low volume and low open interest tend to have wider bid-ask spreads because market makers face greater uncertainty about their ability to offset risk. Even if quoted prices appear attractive, the effective execution price may be materially worse once slippage is considered. Volume and open interest help identify whether quoted prices are reliable or merely indicative.
Execution Quality and Market Impact Risk
Execution quality refers to how closely a trade is filled relative to the intended price. In illiquid options, even modest order sizes can move prices, a phenomenon known as market impact. This risk is amplified in contracts with thin open interest, where fewer resting orders exist to absorb trades.
High open interest reduces market impact by increasing the likelihood that opposing orders already exist. High volume confirms that trades are occurring regularly at those levels. Together, they improve the probability of fills near the mid-price rather than at unfavorable extremes of the spread.
Interpreting Volume and Open Interest Together Before Trading
Evaluating volume or open interest in isolation provides an incomplete picture of execution risk. High volume without sustained open interest may support short-term entry but complicate exit if activity fades. High open interest without current volume may indicate latent liquidity that requires patience to access.
Options traders use both metrics to assess whether liquidity is durable or transient. This assessment directly affects position sizing, order type selection, and expectations around slippage, making volume and open interest practical tools for execution analysis rather than abstract market statistics.
Interpreting Volume and Open Interest Individually: What Each Tells You (and What It Doesn’t)
Although volume and open interest are often analyzed together, each metric conveys distinct information about option market activity. Interpreting them correctly requires understanding what each measures, the behaviors they capture, and their inherent limitations. Treating them as interchangeable leads to misjudgments about liquidity, conviction, and execution risk.
What Trading Volume Represents in Options Markets
Trading volume measures the number of option contracts exchanged during a specific period, typically a trading day. Each contract traded increments volume regardless of whether the transaction opens a new position or closes an existing one. Volume is therefore a flow variable, capturing current activity rather than accumulated exposure.
High option volume indicates that participants are actively transacting at prevailing prices. This activity generally improves short-term liquidity, narrows bid-ask spreads, and increases the probability of timely execution. For traders entering or exiting positions intraday, volume is often the most immediate indicator of tradability.
However, volume alone does not reveal whether trades represent new risk being added to the market. A spike in volume may reflect position unwinding, hedging adjustments, or short-term speculation rather than directional conviction. Without context from open interest, volume cannot distinguish between opening and closing activity.
What Trading Volume Does Not Tell You
Volume does not measure how many contracts remain outstanding after trading concludes. Once the trading session ends, volume resets to zero for the next day, providing no information about ongoing liquidity beyond that window. As a result, high volume today offers no guarantee of liquidity tomorrow.
Volume also does not indicate the durability of price levels. A heavily traded option can become illiquid quickly if interest shifts to different strikes or expirations. Traders relying solely on volume risk underestimating exit difficulty if activity proves temporary.
What Open Interest Represents in Options Markets
Open interest measures the total number of outstanding option contracts that have not been closed, exercised, or expired. It increases when new positions are opened and decreases when positions are closed by offsetting trades. Open interest is therefore a stock variable, reflecting accumulated market exposure.
High open interest suggests that a contract has broad participation and sustained engagement across market participants. This depth typically supports tighter bid-ask spreads and reduces market impact, as more counterparties are positioned to transact. Open interest is especially relevant for assessing exit liquidity over multi-day or multi-week holding periods.
In addition, open interest helps identify where risk is concentrated across strikes and expirations. Elevated open interest at specific levels often reflects hedging activity, income strategies, or structured positioning rather than speculative trading alone. This concentration can influence price behavior near expiration due to hedging flows.
What Open Interest Does Not Tell You
Open interest does not indicate current trading activity or immediacy of execution. A contract may have high open interest but very low daily volume, resulting in slow fills and wide spreads. In such cases, liquidity exists in theory but is not readily accessible without price concessions.
Open interest also provides no direct insight into directional bias. Long and short positions are always created in pairs, meaning open interest cannot reveal whether market participants are net bullish or bearish. Interpreting open interest as directional conviction without supporting price and volume data is analytically unsound.
Why Neither Metric Is Sufficient on Its Own
Volume captures urgency and immediacy, while open interest captures depth and persistence. Each addresses a different dimension of liquidity and risk, and each omits critical information provided by the other. Relying on one metric in isolation increases the likelihood of execution surprises and misinterpreted market signals.
For options traders, the analytical value lies in understanding these limitations before integrating both metrics into a unified assessment. Only by recognizing what volume and open interest can and cannot explain individually can they be applied effectively to execution planning and trade evaluation.
Reading Volume and Open Interest Together: Signals of Conviction, Position-Building, and Risk
When evaluated jointly, volume and open interest provide a more complete picture of options market behavior than either metric alone. Volume reflects current activity and urgency, while open interest reflects existing exposure and longer-term positioning. Their interaction helps distinguish between transient trading and meaningful position-building, which has direct implications for liquidity, execution quality, and risk.
Understanding how these metrics change relative to each other allows traders to infer whether new risk is being added, existing risk is being transferred, or positions are being unwound. These distinctions are critical when assessing the durability of price movements and the reliability of apparent liquidity.
Rising Volume with Rising Open Interest: Evidence of New Position-Building
When both volume and open interest increase simultaneously, new positions are being created rather than merely exchanged. This pattern indicates that traders on both sides are willing to commit fresh capital at current prices, reflecting stronger conviction or structured exposure. In options markets, this often accompanies directional views, volatility expectations, or hedging needs tied to future events.
From a liquidity perspective, rising open interest can improve depth over time, while rising volume supports tighter bid-ask spreads in the near term. However, increased participation does not imply directional consensus, as buyers and sellers are equally represented in the creation of new contracts.
High Volume with Flat or Declining Open Interest: Position Transfer or Unwinding
Elevated volume alongside stable or falling open interest suggests that existing positions are being closed or transferred between participants. One trader exits while another assumes the position, resulting in significant trading activity without an increase in total outstanding contracts. This dynamic is common around profit-taking, stop-outs, or rolling activity ahead of expiration.
Although execution may appear easy due to high volume, the lack of growing open interest implies limited reinforcement of the prevailing price move. Once the transfer or liquidation is complete, liquidity can deteriorate quickly, increasing the risk of wider spreads and slippage.
Rising Open Interest with Modest Volume: Gradual Risk Accumulation
An increase in open interest without unusually high daily volume indicates steady, incremental position-building over multiple sessions. This pattern often reflects institutional hedging programs, income strategies, or structured trades executed with minimal urgency. The resulting liquidity is real but may not be immediately accessible at tight prices.
For traders planning multi-day or multi-week positions, this environment can support exits over time but may not accommodate rapid adjustments. Bid-ask spreads can widen temporarily during periods of market stress despite the presence of substantial open interest.
Divergences Between Price Movement, Volume, and Open Interest
Price changes accompanied by low volume and stagnant open interest warrant skepticism. Such moves are more likely driven by temporary order imbalances or changes in implied volatility rather than broad-based conviction. Without participation and position expansion, these price shifts are less reliable and more prone to reversal.
Conversely, strong price movement supported by both rising volume and open interest suggests that the move is being validated by sustained engagement. Even in this case, the signal reflects participation, not correctness, and must be evaluated alongside volatility, time to expiration, and strike-specific positioning.
Risk Implications Near Expiration and Key Strikes
As expiration approaches, the interaction between volume and open interest becomes increasingly important. High open interest at specific strikes can lead to concentrated hedging activity by market makers, influencing short-term price behavior through delta hedging, which is the adjustment of underlying exposure to remain neutral.
If volume spikes sharply near these strikes without a corresponding increase in open interest, it often signals rapid position unwinding. This can amplify intraday volatility and degrade execution quality, particularly for traders attempting to exit positions quickly.
Reading volume and open interest together does not provide directional certainty, but it materially improves situational awareness. The combined analysis clarifies whether liquidity is transient or durable, whether participation is expanding or contracting, and whether observed price behavior is supported by meaningful risk commitment.
Practical Trading Applications: Strike Selection, Expiration Choice, and Avoiding Illiquid Traps
The combined interpretation of trading volume and open interest becomes most actionable when applied to concrete decisions such as strike selection, expiration choice, and liquidity risk management. These variables shape not only pricing efficiency but also the feasibility of entering, adjusting, and exiting positions without excessive transaction costs. Understanding their practical implications reduces exposure to structural risks that are often misattributed to market direction.
Strike Selection and Liquidity Concentration
Option liquidity is rarely distributed evenly across strikes. Trading volume and open interest tend to concentrate near at-the-money strikes, where sensitivity to underlying price movement, known as delta, is highest and hedging demand is most consistent. These strikes typically exhibit tighter bid-ask spreads and deeper order books, improving execution quality.
Far out-of-the-money and deep in-the-money options often show lower volume and thinner open interest, even when they appear attractively priced. In these cases, quoted prices may not reflect executable levels, and small trades can materially move the market. Low participation at a strike increases exposure to slippage, defined as the difference between expected and actual execution prices.
Expiration Choice and the Stability of Liquidity
Expiration selection materially affects how volume and open interest translate into usable liquidity. Near-term expirations often display high daily volume but relatively modest open interest, reflecting short holding periods and frequent position turnover. This liquidity can be transient, disappearing quickly outside peak trading hours or during volatility spikes.
Longer-dated expirations typically accumulate higher open interest, signaling sustained positioning over time. While daily volume may be lower, the depth provided by open interest can support more stable bid-ask spreads across market conditions. This distinction matters when positions are intended to be managed over multiple days rather than traded intraday.
Volume-Driven Activity Versus Position Commitment
High volume alone does not guarantee durable liquidity. Volume measures contracts traded during a session, while open interest measures contracts that remain open at the end of the day. Elevated volume without growth in open interest often reflects position closing, rolling, or short-term speculation rather than new risk being added.
When selecting strikes and expirations, persistent open interest indicates that other market participants are willing to maintain exposure at those levels. This ongoing commitment supports tighter markets and reduces the likelihood that liquidity evaporates when conditions change. Volume confirms current activity, but open interest provides context about continuity.
Avoiding Illiquid Traps and Execution Risk
Illiquid traps occur when an option appears tradable based on quoted prices but lacks sufficient participation to support efficient execution. Wide bid-ask spreads, inconsistent quote sizes, and minimal open interest are common warning signs. Entering such contracts increases reliance on favorable market movement merely to offset transaction costs.
The risk is magnified during periods of stress or near expiration, when market makers may widen spreads or withdraw entirely. In these environments, the absence of open interest means fewer counterparties are available to absorb trades. Evaluating volume and open interest together helps identify whether observed liquidity is structural or fleeting.
Integrating Volume and Open Interest into Trade Assessment
Effective strike and expiration selection requires viewing volume and open interest as complementary signals rather than substitutes. Volume reveals where activity is occurring now, while open interest shows where risk is being carried forward. Their alignment supports reliable pricing and execution; their divergence highlights potential fragility.
This framework does not predict price direction, but it materially improves trade quality. By favoring contracts with demonstrable participation and sustained positioning, traders reduce exposure to hidden liquidity risks that can dominate outcomes regardless of market thesis.
Common Misinterpretations, Edge Cases, and Advanced Nuances for Active Options Traders
As volume and open interest become part of routine trade screening, misinterpretation becomes a primary source of error rather than omission. These metrics are mechanically simple but context-dependent, and surface-level readings can obscure what is actually occurring beneath the quotes. Active options traders benefit from understanding where these indicators fail, overlap, or require additional interpretation.
High Volume Does Not Automatically Signal Conviction
A frequent misconception is that elevated trading volume reflects strong directional conviction. In reality, volume only confirms that contracts are changing hands, not why they are trading. Activity may stem from hedging flows, delta-neutral strategies, arbitrage, or position unwinds rather than directional bets.
For example, high volume driven by short-term gamma scalping or market maker rebalancing can leave no residual positioning once the session ends. Without a corresponding increase in open interest, the activity represents transient risk transfer rather than durable exposure. Treating such volume as a signal of sustained sentiment overstates its informational value.
Open Interest Can Decline for Constructive Reasons
Falling open interest is often interpreted as bearish or disengagement, but this view is incomplete. Open interest naturally declines as expiration approaches, even when participants remain active through rolling positions to later maturities. A decrease may reflect orderly risk migration rather than liquidation.
Additionally, open interest can compress following major informational events, such as earnings or economic releases, when uncertainty resolves. In these cases, declining open interest may indicate risk reduction after resolution, not a lack of market interest. Context around timing and catalysts is essential.
Volume Spikes Near Expiration Are Structurally Distorted
Options approaching expiration frequently exhibit sharp increases in volume without meaningful implications for liquidity or conviction. Many of these trades involve closing positions, exercise-related adjustments, or hedging flows tied to rapidly changing delta, defined as the option’s sensitivity to changes in the underlying price.
Because time value is minimal near expiration, even small underlying movements can force mechanical trading. These flows inflate volume but rarely translate into persistent open interest or post-expiration relevance. Interpreting expiration-week volume using the same framework as longer-dated contracts leads to false signals.
Low Volume Contracts Can Still Be Liquid Under Specific Conditions
Low reported volume does not always imply poor tradability. Some strikes maintain tight bid-ask spreads due to concentrated open interest and consistent market maker presence, even if daily trading activity is limited. In these cases, liquidity is latent rather than continuously expressed through volume.
This nuance is most common in standardized strikes near at-the-money for widely traded underlyings. The key distinction is whether open interest supports competitive quoting. Volume reflects what has happened, while open interest influences what can happen when a trade is initiated.
Interpreting Changes Requires Netting Buyers and Sellers
Both volume and open interest are agnostic to trade direction. An increase in open interest indicates that new positions were created, but it does not reveal whether traders are net long or net short. Every option contract has both a buyer and a seller, each with different motivations and risk profiles.
Advanced interpretation requires considering who is likely initiating trades. For instance, customer buying against market maker selling carries different implications than institutional overwriting strategies. Without this perspective, conclusions drawn from open interest growth remain probabilistic rather than definitive.
Relative, Not Absolute, Levels Carry More Information
Absolute volume or open interest levels are less informative than changes relative to historical norms. A contract trading 5,000 contracts per day may be active for one underlying and irrelevant for another. Baselines vary widely across symbols, expirations, and market regimes.
Evaluating participation requires normalization, comparing current activity to the contract’s own history and to adjacent strikes or maturities. This comparative approach highlights where attention and risk are shifting, which is more actionable than raw figures in isolation.
Liquidity Is a Distribution, Not a Single Number
Liquidity cannot be fully inferred from a single snapshot of volume or open interest. It emerges from the interaction of participant diversity, inventory willingness, hedging costs, and market conditions. Bid-ask spreads are the visible output of this system, not its sole determinant.
During calm markets, even modest open interest may support efficient execution. Under stress, high open interest can fragment as participants withdraw or widen quotes. Volume and open interest provide necessary inputs, but execution risk ultimately reflects the broader microstructure environment.
Final Perspective for Active Options Traders
Volume and open interest are foundational tools for evaluating options liquidity, execution risk, and the durability of market participation. Their value lies not in signaling direction, but in clarifying whether observed prices are supported by sustained engagement or fleeting activity. Misreading these indicators often leads to overconfidence in trades where structural liquidity is weak.
A disciplined approach treats volume as evidence of current interaction and open interest as evidence of ongoing commitment. When interpreted together, and adjusted for context, timing, and contract structure, they materially improve trade selection and risk assessment. This analytical framework enhances decision quality without relying on prediction, which remains the most robust use of these metrics in options markets.