$PENGU 1-hour contract open interest rose 23.06%; the price rose 0.4% over the same period.
A newbie asks the million-dollar question: What is open interest?
Open interest in futures represents the combined demand for speculation and hedging. Some positions are held solely to hedge spot-market risk.
Rising prices with falling open interest are generally interpreted as short positions closing; falling prices with declining open interest are often seen as longs closing out. These are rules of thumb, not definitive conclusions.
Extreme readings usually signal greater volatility. At such times, it’s better to reduce leverage than to make a big bet.
A newbie asks the million-dollar question: What is open interest?
Open interest in futures represents the combined demand for speculation and hedging. Some positions are held solely to hedge spot-market risk.
Rising prices with falling open interest are generally interpreted as short positions closing; falling prices with declining open interest are often seen as longs closing out. These are rules of thumb, not definitive conclusions.
Extreme readings usually signal greater volatility. At such times, it’s better to reduce leverage than to make a big bet.