A quick note: Open interest in $ARC 1-hour futures contracts rose 155.37%, with the value of open positions at about $23.41 million; the price rose 2.28% over the same period.
People often ask how to interpret open interest. Here’s how I understand 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 stays the same.
If the price barely moves while open interest rises noticeably, it means both bulls and bears are adding to their positions. A larger price move may then be more likely, but its direction is hard to predict.
Comparing several indicators is more reliable than looking at just one, but even more indicators can’t provide a definitive answer.
#ARC
People often ask how to interpret open interest. Here’s how I understand 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 stays the same.
If the price barely moves while open interest rises noticeably, it means both bulls and bears are adding to their positions. A larger price move may then be more likely, but its direction is hard to predict.
Comparing several indicators is more reliable than looking at just one, but even more indicators can’t provide a definitive answer.
#ARC