Derivatives · Concept note
Open Interest
The total amount of derivative contracts that remain open and have not been closed or offset.
Definition
Open interest (OI) is the number or notional value of futures and options contracts currently open. It rises when new counterparties create contracts and falls when existing positions are closed. Unlike volume, which counts trades over a period, OI measures contracts outstanding at a point in time.
Why it matters
OI helps show how much new positioning and leverage accompanies a price move. It does not reveal which side is in control, so it should be read with price, volume, funding, and liquidation data.
Calculation and example
Open-interest change (%) = (current OI − previous OI) ÷ previous OI × 100
If BTC rises 2% from $60,000 to $61,200 while OI increases 10% from $1.0 billion to $1.1 billion, new leveraged positions may be entering. New shorts are part of those contracts too, so this alone cannot confirm that the rally will continue.
What to check when interpreting it
- Rising price and OI can indicate fresh positioning.
- A sharp price move with falling OI can point to liquidations or broad position closure.
- Use the same venue coverage and currency unit when comparing data.
Common misconception
Rising OI does not mean buying pressure increased. Every derivative contract has both a long and a short side.