OPEN INTEREST



Open interest is the total number of outstanding derivative contracts for an asset (such as options or futures) that have not been settled.

Open Interest is used as an indicator to determine market sentiment & the strength behind price trends.

▫️Open interest decreases when buyers (or holders) & sellers (or writers) of contracts close out more positions than were opened that day.

▫️Open interest increases once again when investors & traders open more new long positions or sellers take on new short positions in an amount greater than the number of contracts that were closed that day.

🔺REMEMBER

► When open interest increases, it usually means new money is coming.

► Rising open interest usually means that there is new buying happening (which is a bullish trend).

► If open interest grows too high, it can sometimes be a bearish signal that indicates a coming change in market trends.
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