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For each buyer of a futures contract there must be a seller. From the time the buyer or seller opens the contract until the...

For each buyer of a futures contract there must be a seller. From the time the buyer or seller opens the contract until the counter-open interest analysis pdf closes it, that contract is considered ‘open’.


This article contains weasel words: vague phrasing that often accompanies biased or unverifiable information. Such statements should be clarified or removed. Many technical analysts believe that a knowledge of open interest can prove useful toward the end of major market moves.

For some option traders, open interest indicates the intensity of trading in a financial instrument. If open interest increases suddenly, it is likely that new information about the underlying security has been revealed, which may indicate a near-term rise in the underlying security’s volatility. However, neither an increase in volatility nor open interest necessarily indicate anything about the direction of future price movements.

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