Any significance to call volume being greater than open interest?

Discussion in 'Options' started by ggg12, May 29, 2007.

  1. ggg12


    on BCSI for example:

    the june 40 calls did 3,119 contracts today but open interest is 1,775. the premiums were selling at 2.70 as stock closed at 40.83. gapped up to 42 in afterhours.

    any signifiance to the volume on the calls vs open interest?

  2. nikko309


    Yeh, it means that there was a lot of interest in the options because BCSI reported earnings AMC and that there were a lot of closing transactions today - hence explaining the volume being greater than the open interest.
  3. ggg12


    tx, but i'm referring to whether it foreshadowing a squeeze setting up in the a.m.
  4. It would help to know what the change in the open interest was for the day. That could reveal clues as to whether positions were being accumulated or liquidated as a result of the impending news.
  5. My 2 cents is that I'd I'd pay more attention to what they say in the conference call and the reaction to it than to yesterday's open interest changes.
  6. cdowis


    The folks at looks at that sort of stuff -- unusual activity in an option.
  7. RL8093


    Yes - they monitor option activity & look for unusual volume that is not easily explained. Sometimes this can be a 'tell' that insiders are trading on a possible event (merger, buyout, etc - see other threads on how accurate Mr's Najarian are at this).

    In this case, as explained by nikko309 above, there was a known event. The company reported earnings after hours.