Open interest (also known as open contracts or open commitments) refers to the total number of derivative contracts, like futures and options, that have not been settled in the immediately previous time period for a specific underlying security. A large open interest indicates more activity and liquidity for the contract.
For each buyer of a futures contract there must be a seller. From the time the buyer or seller opens the contract until the counter-party closes it, that contract is considered 'open'.
Read more about Open Interest: Use of Open Interest in Technical Analysis, The Importance of Open Interest, Benefits of Monitoring Open Interest, Open Interest - A Confirming Indicator
Famous quotes containing the words open and/or interest:
“Manuel showed her his open hand: “Look at this finger, how meager it seems, and this one even weaker, and this other one no stronger, and this one all by himself and on his own.”
Then he made a fist: “But now, is it strong enough, big enough, solid enough? It seems so doesn’t it?””
—Jacques Roumain (1907–1945)
“There is a blessed necessity by which the interest of men is always driving them to the right; and, again, making all crime mean and ugly.”
—Ralph Waldo Emerson (1803–1882)