Open interest is the total number of open contracts at any given point in time. It’s a good way to measure how much money is being invested in a particular asset or market.In the example below, there are three traders who have entered into long positions on Apple Inc. (AAPL) stock: Trader A has bought 10 contracts; Trader B has bought 5 contracts; and Trader C has sold 10 contracts.Open interest refers to all outstanding futures contracts–both long and short positions–that have not yet been closed out by their owners before expiry date arrives (if any). Open interest measures how much money is being invested in a particular asset or market at any given moment in time
When you understand the concept of open interest, it can help you make better trading decisions. This is because open interest gives traders a glimpse into what other market participants are doing at any given time.Open interest is an important metric that helps traders determine whether there are more buyers or sellers in the market at any given time. It also helps them identify whether there is high liquidity in certain assets, which means they will be able to get out of their positions without having to pay too much for their trades (or vice versa).Open interest has implications for every type of investor: long-term investors may want to use this information when making investment decisions; short-term traders should use it as part of their trading strategy; day traders can use it along with other indicators like price action signals when making trades on an intra-day basis; and scalpers can use it as another piece of information when deciding whether or not they should enter into a particular trade opportunity at any given moment during the day’s session.
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