Open interest relative to price trend

There are 2 components to futures open interest data:

  • Non-expiring futures contracts (also known as perpetual swaps or perpetuals)

  • Expiring futures contracts

Open interestPrice trendImplications

High and rising


Over-leveraged long positions, potential bearish reversal

Remains high

Falling from peak

Traders buying the dip on leverage, exposing themselves to a long squeeze

High and rising


Over-leveraged short positions, potential bullish reversal

Remains high

Rising from bottom

Traders shorting the spike on leverage, exposing themselves to a short squeeze

When open interest is falling, it indicates a reversal is taking place.

When open interest is low, it indicates that leverage levels are low (significant de-leveraging has taken place).

Open interest is positively correlated to volatility. Option prices, represented by implied volatility, is positively correlated with open interest.

Sources of open interest data are:

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