Open interest and volume are inter-related. A change in the open interest and volume will usually be accompanied by a change in price saying that the market is ready to move forward or retrace to a lower level.

Open interest indicates the number of open contracts in futures trading. An open futures contract consists of a long and a short trading a single contract. Some exchanges treat that as 1 open interest while some exchanges treat that as 2 since two parties are involved in the trade. In general, the more open interest a futures contract has, the more liquid it is.

Technicians in the financial markets us a multidimensional approch to market analsyis. By tracking the movement of three sets of figures- price, volume, and open interest. Open interest primarily applys to future markets. The total number of outstanding or unliquidated contracts at the end of the day is open interest. Remember that offical volume and open interest figures are reported a day late in the futures makets and are, there for, plotted with a one day lag. open interest represents the total number of outstanding longs or shorts in the market, NOT!! the sum of both. Open interest is the number of contracts. A contrat must both have a buyer and a seller. There for, two market participants-a buyer and a seller- combine to create one contract. Open interest fugures is reported each day is followed by either a positive or negative number showing the increase or decrease in the number of contracts for that day. Its those changes in open interest levels either up or down, that give clues as to the changing charactor of market participation and gives open interest its forcasting value.

Rissa

OI is Open Interest. This refers to how many open contracts exist.

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