Open Interest

The total number of outstanding derivative contracts (futures or options) that have not been settled or closed.

Open interest represents the total number of active contracts in a derivatives market. Each contract requires both a buyer and a seller, so open interest counts the number of unique contracts, not the number of participants.

How Open Interest Changes

  • New buyer + New seller → Open interest increases by 1
  • Existing buyer sells to new buyer → Open interest unchanged
  • Existing buyer sells to existing seller → Open interest decreases by 1

Open Interest vs Volume

MetricOpen InterestVolume
MeasuresOutstanding contractsContracts traded in a period
ResetsNever (cumulative)Resets each period
IndicatesMarket participationTrading activity

Why Open Interest Matters for Margin Traders

1. Liquidity indicator: Higher OI = more liquid market 2. Trend confirmation: Rising OI + rising price = strong bullish trend 3. Reversal signal: Falling OI + rising price = weakening trend 4. Squeeze potential: Very high OI with concentrated positions = squeeze risk

Frequently Asked Questions

Is high open interest bullish or bearish? +
Where can I check open interest? +

Related Terms

Perpetual ContractFutures ContractFunding Rate

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