Open interest

Open interest refers to the total number of outstanding options or futures contracts that are not yet settled or closed. It indicates the activity and liquidity in a particular market, showing how many contracts are currently active. When open interest increases, it suggests new money is flowing into the market, reflecting growing interest. Conversely, a decrease indicates contracts are being closed or settled, possibly signaling waning interest. Open interest helps traders gauge market strength, sentiment, and potential price movements, serving as an important indicator alongside price trends.