What is open interest?

Each outstanding contract has a corresponding long and short. Longs usually gain when price rises; shorts have the opposite exposure. Opening creates a position; closing reduces or ends it.

Counting each contract once, total longs of 100 contracts and total shorts of 100 imply OI of 100. A field adding both sides would show 200. The examples below count contracts once; platform data must be checked for its actual counting basis.

When both parties open, new matching long and short positions increase OI. When both close existing positions, OI falls. When one closes and the other opens, one exits while another continues the same direction, leaving outstanding contract count unchanged.

Suppose OI starts at 100. Both parties open five corresponding contracts, raising it to 105. The seller then closes three longs while the buyer opens three longs, leaving 105. Finally both close two corresponding contracts, reducing it to 103.

Events such as expiry settlement can also reduce OI without an ordinary market trade. OI changes alone cannot reconstruct period volume.

With consistent specifications, counting and scope, a larger count means more outstanding contracts. Increases and decreases show net additions and reductions.

Currency notional values mean something different. Notional is monetary size converted using specifications and valuation methods. If market prices enter that calculation, price rises can increase notional even with unchanged contract count. Fixed-dollar-face-value contracts require their own conversion, not unconditional multiplication by asset price again.

OI is not contributed margin or immediately executable order-book quantity. The order book lists unfilled quotes and quantities; OI counts established, unresolved contracts. Larger OI does not guarantee narrower spreads or easier execution.

Matching long and short quantities do not imply equal numbers of traders: one person may hold many contracts. Increasing OI does not show more buyers or independently predict direction.

Check four things before comparing:

• Counting basis: one-sided contracts or the sum of longs and shorts.

• Units and specifications: contract count, underlying quantity or currency notional, with consistent size per contract.

• Scope: one perpetual, a particular expiry month or several contracts combined.

• Time: snapshot timestamp, update frequency and delay.

Even after confirming two-sided counting, dividing by two resolves only that issue, not differences in units, scope or time. An API name or OI label alone does not establish these rules.

Ordinary spot trading exchanges assets, not the unresolved derivative contracts measured here. Spot holdings or borrowing liabilities are different indicators from derivatives OI.