Trading glossary · practical definition
What is open interest?
The number or notional value of derivatives contracts that remain open.
Open interest in plain English
The number or notional value of derivatives contracts that remain open.
Rising OI means new positions are being added; falling OI means positions are being closed. Direction still requires price and flow context.
Practical example
Price rising with OI rising can indicate new participation. Price rising while OI falls can instead reflect short covering.
Common mistake
Treating higher OI as automatically bullish.
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