Total outstanding futures contracts. Rising OI + rising price = healthy bull; Rising OI + falling price = short buildup.
How Open Interest is calculated
Focus on the divergence or convergence between OI and price movement.
How to read it
- Sentiment and derivatives metrics change quickly and are useful for gauging crowding and leverage risk.
- Extreme readings often coincide with short-term volatility; manage position size and liquidation distance before taking a view.
Limitations and common misreads
- Historical thresholds come from a limited sample; future cycles can differ.
- Data providers can define the metric differently; cite the data date when quoting it.
- A single indicator is not investment advice and does not guarantee price direction.
Related indicators
Research and education only; not investment advice.
