Open Interest

Every futures contract requires two parties: one agreeing to buy, one agreeing to sell. Open interest counts the number of such active agreements outstanding at any given moment. It rises by one when a new contract is created between two parties, and it falls by one when an existing contract is closed or reaches settlement. Open interest is distinct from volume — volume counts how many contracts changed hands during a session, while open interest reflects how many are still alive at the end of it. Our market liquidity guide puts both measures in context.

Think of it this way: suppose 100 new contracts are traded on Monday and all 100 are between brand-new participants. Open interest rises by 100. On Tuesday, 50 of those participants close their positions with each other. Volume for Tuesday is 50, but open interest falls by 50 — back to 50 outstanding contracts. The two measures answer different questions: volume asks "how busy was the market today?" and open interest asks "how much risk is currently committed?"

Analysts historically watch open interest alongside price movements to gauge conviction. Rising prices accompanied by rising open interest suggest new money is entering the market on the long side — a different signal than the same price rise on falling open interest, which may mean short-sellers are simply covering positions. Open interest data is published daily for major futures markets and appears alongside price tables on commodity pages and currency futures data. It is particularly watched in energy and metals markets covered in our crude oil and gold guides.