Encyclopedia Classification
Category: Derivatives Analysis • Market Positioning • Trader Behavior
Discipline: Futures Data • Leverage Analysis • Sentiment • Market Structure
Prerequisites
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Article 183 — Futures Trading: Perpetual Contracts, Open Interest, Funding Rates, and Professional Derivatives Strategies
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Article 182 — Leverage and Margin Trading: How Professional Traders Use Borrowed Capital Without Destroying Accounts
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Article 172 — Liquidity: Understanding Where Money Actually Exists in the Market
Related Articles
Funding Rates • Liquidation Analysis • Order Flow • Volume Analysis • Market Sentiment • Smart Money Concepts
Definition
Open Interest (OI) is the total number of outstanding derivative contracts that remain open in a futures market.
It represents the amount of capital and leverage currently committed by traders.
Open interest answers:
"How much speculative positioning exists in the market right now?"
Unlike volume:
Volume measures:
How much trading activity occurred.
Open Interest measures:
How many active positions remain open.
Beginner Explanation
Imagine a casino.
Volume tells you:
How many bets were placed today.
Open interest tells you:
How many bets are still active.
A market with high open interest has many traders with money committed.
That means:
More potential fuel.
But also:
More potential forced liquidations.
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