Module 4   Futures Trading (Video Series)Chapter 7

Open Interest

View chapters →

7.1 – Open Interest and its calculation

Open Interest (OI) is a number that tells you how many futures (or Options) contracts are currently outstanding (open) in the market. We will learn more in this video.

In the following final video from this video series, we will learn how to short futures.

We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.


Key takeaways from this chapter

  1. Open Interest (OI) is a number that tells you how many contracts are currently outstanding (open) in the market.
  2. OI increases when new contracts are added. OI decreases when contracts are squared off.
  3. OI does not change when contracts are transferred from one party to another.
  4. Unlike volumes, OI is continuous data.
  5. On a stand-alone basis, OI and Volume information does not convey information; hence it makes sense always to pair it with the price to understand the impact of their variation.
  6. Abnormally high OI indicates high leverage. Beware of such situations.
Post a comment