Derivatives 1 min read
Open Interest
Also known as: OI
Total notional value of outstanding derivatives contracts. Grows when new positions open, shrinks when positions close.
How OI moves
| Price | OI | Interpretation |
|---|---|---|
| Up | Up | Fresh longs fueling the move |
| Up | Down | Shorts covering (squeeze) |
| Down | Up | Fresh shorts pressuring price |
| Down | Down | Longs capitulating |
What to watch
- OI at all-time highs — leverage build-up, volatility incoming.
- Sudden OI crash — liquidation cascade, positions forcibly closed.
- Divergence between OI and price can precede trend changes.
OI is most useful alongside funding rate and liquidation data.