Update to Apple Open Interest Chart

Here’s an update to yesterday’s open interest chart for AAPL. You can see that the calls had about a 1% drop in overall open interest yesterday, as AAPL charged higher:

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Open interest decline would suggest to me that options writers wanted less exposure and bought to close them out. I don’t know if that is accurate, so somebody correct me if not. Another small datapoint in the fade OI camp.

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3 Responses to “Update to Apple Open Interest Chart”

  1. Daniel Says:

    Do you write custom excel macros and think scripts for money? If so, shoot me an email. I’m very interested in your work and could use your services if available. Thanks – goodchild.

  2. Prospectus Says:

    Yes I do, but I’m pretty swamped right now. Maybe after the holidays. Email me readtheprospectus at gmail.

  3. Michael Tamillow Says:

    It seems almost right, Prospectus. If one person were closing out a position, the person on the other end could be either opening or closing out a position. So you would expect a 50% chance that the position is closing, and 50% that it is opening, assuming randomness of market makers holding or not holding positions. Positions closing would decrease open interest, while positions opening would cause the open interest to stay the same, based on net changes.

    Consider the opposite scenario of people opening positions, the trade on the opposite end would either increase open interest or cause it to stay the same, with 50/50 probability. So it would be a 25% chance of increasing 50% stays the same, and 25% chance of decreasing according to our model. However. as you can tell the model is inaccurate.

    When open interest is at 0, it can only go one direction, which affects our model. Also, options holders can wait until expiration. Both these cause decreasing open interest to look like an anomaly. Whether it is those writing options, or those buying options..? It has to be both to have that affect. So I would say that the market is saturated with market makers here… Everybody’s favorite company (besides Tesla)

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