From Nism series 8 workbook
An open interest is the total number of contracts outstanding (yet to be settled) for an
underlying asset. The quotes given above show us on August 9, 2010 Nifty futures has
an open Interest of 32062850. It is important to understand that number of long futures
as well as number of short futures is 32062850. This is because total number of long
futures will always be equal to total number of short futures. Only one side of contracts
is considered while calculating/ mentioning open interest. On August 8, 2010, the open
interest in Nifty futures was 30959200. This means that there is an increase of 1103650
in the open interest on August 9, 2010. The level of open interest indicates depth in the
market.
Volumes traded give us an idea about the market activity with regards to specific
contract over a given period – volume over a day, over a week or month or over entire
life of the contract.