A note: Open interest in $EPIC 1-hour contracts rose 38.33%, with the value of open positions at about $1.56 million; the price rose 5.23% over the same period.
People often ask how to interpret open interest. Here’s how I think about it.
When both buyers and sellers open new positions, open interest increases. When both sides close positions, it decreases. When one side opens a position and the other closes one, open interest remains unchanged.
A high level of open interest isn’t inherently bullish or bearish; it just means more money is at stake and the tug-of-war between the two sides is more intense.
Extreme readings are usually accompanied by greater volatility. At times like these, it’s better to reduce your position rather than add to it.
People often ask how to interpret open interest. Here’s how I think about it.
When both buyers and sellers open new positions, open interest increases. When both sides close positions, it decreases. When one side opens a position and the other closes one, open interest remains unchanged.
A high level of open interest isn’t inherently bullish or bearish; it just means more money is at stake and the tug-of-war between the two sides is more intense.
Extreme readings are usually accompanied by greater volatility. At times like these, it’s better to reduce your position rather than add to it.