Open interest relative to price trend
Last updated
Last updated
There are 2 components to futures open interest data:
Non-expiring futures contracts (also known as perpetual swaps or perpetuals)
Expiring futures contracts
High and rising
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
Falling
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).
Sources of open interest data are: