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| Discuss open intrest at the Futures within the Traderji.com - Discussion forum for Stocks Commodities & Forex; dear all senior members i want to know about open intrest ? what do you ... |
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#1
6th July 2007, 10:14 PM
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open intrest
dear all senior members i want to know about open intrest ? what do you mean by open intrest add in open intrest, shed in open intrest ?
how it helps in treading and what we watch before to trade 
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#2
7th July 2007, 01:30 PM
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Re: open intrest
In F&O, for every contract bought, there is a contract sold. When you have bought a contract & then sell this contract, (or vice versa) you are closing this position, and, the contract no longer exists. This way, the total no. of contracts keep increasing or decreasing. All existing contracts are closed on the expiry date.
By the way, the total no. of contracts outstanding is called the open interest (OI). When OI goes up, that means there is renewed interest in that contract, and, vice versa. Does not mean bullish or bearish! This is to be associated with the price movement to determine the expected trend in futures. With options it is more complex. OI reducing in Calls mean market is generally expected to go down, and, vice versa in Puts. Variations in OI can be due to other reasons as well, like, expiry nearing, due to position shifting to next month contracts, etc.,
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