Definition
Open interest is the number or notional value of futures or perpetual futures positions that remain open rather than closed or offset.
How open interest changes
Open interest increases when new positions create additional outstanding contracts and decreases when existing positions are closed. Every contract has a long side and a short side, but the contract is counted once rather than once for each side.
Venues may report open interest in contracts, units of the underlying market or a currency value. Comparisons require the same unit and timestamp, especially when prices move quickly.
Open interest is not trading volume
Volume counts activity during a period, including trades that open, transfer or close positions. Open interest is the outstanding position total at a point in time. High volume can occur while open interest falls if traders are closing positions.
What it does not mean
Open interest measures outstanding derivatives exposure. It does not measure the number of traders, available order-book liquidity or the direction of the next price move.
Where this term fits
Questions about open interest
- Is open interest the same as volume?
- No. Volume counts trades during a period. Open interest counts positions that remain open at a point in time.
- Are the long and short sides counted twice?
- No. One contract links a long and a short, and open interest counts that outstanding contract once.
- Does rising open interest mean the price will rise?
- No. It shows that outstanding exposure is growing, but it does not determine price direction by itself.
See these concepts in context
Review the Fensory MCP connection, tools and account controls.