Does anyone know what it means when the volume for a particular option is greater than the open interest? For example, if the volume for an at the money call option is much greater than its respective open interest, could this indicate a bullish or bearish signal? Or is there no relationship between volume and open interest?
Volume could be trades which open positions (increasing OI) or closing positions (decreasing OI) so in general the info does not tell you much.
high option volume simply means a lot of options are changing hands (to close or to open positions or to hedge, but we don't know which). Sadly, no meaningful conclusions can be drawn from this. db