Open Interest

Sabtu, 06 November 2010

Open interest is the number of contracts that are trading for a particular commodity. The basic rules for open interest are similar to those for volume. They are as follows:
Price                              open interest                              interpretation
Rising                               Up                                                Bullish
Risi                                  Down                                            Bearish
Declining                          Up                                                Bearish
Declining                         Down                                            Bullish
Expanding, open interest in an uptrend represents aggressive new buying and is bullish. On the other hand, expanding open interest in a downtrend represents aggressive new short selling and is bearish.
Declining open interest in an uptrend represents short covering, not new buying, and is bearish. However, declining open interest in a downtrend suggests the liquidation of losing long positions and is bullish.

sumber: The Technical Analysis Course

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