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:
“When the inhabitants of some sequestered island first descry the big canoe of the European rolling through the blue waters towards their shores, they rush down to the beach in crowds, and with open arms stand ready to embrace the strangers. Fatal embrace! They fold to their bosoms the vipers whose sting is destined to poison all their joys; and the instinctive feeling of love within their breasts is soon converted into the bitterest hate.”
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