Open interest

Open interest is the total number of futures or options contracts that are still open, not yet closed or settled. It shows how much positioning exists, not which side is right.

How Open interest is calculated

Open interest rises when a new buyer and a new seller open a contract together. It falls when both sides close, and is unchanged when one trader hands an existing contract to another. Every contract has a long and a short, so open interest alone does not say whether positions are net long or short.

How it is read

Rising open interest with rising price is often read as new money entering. Falling open interest with rising price is read as shorts closing. These are readings, not rules.

Common mistakes

• Reading rising open interest as bullish by itself.
• Comparing the number of contracts across venues with different contract sizes.
• Using it as a signal without checking what happened after similar readings.

What Tickfloor tested

Tickfloor's research desk has backtested 678 strategies, net of modelled trading costs. After correcting for the 761 tests run, 0 passed. That does not prove no strategy works. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.

• Funding Rate and Open Interest (claim test)

• Short definition in the glossary

Related concepts

• Funding rate
• Leverage
• Volume
• Fear and Greed index
• All concepts

General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.

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