Let’s talk about open interest.
If both sides of a trade are opening new positions, open interest rises; if both sides are closing positions, it falls; if one side opens a position while the other closes one, it stays the same.
One thing that’s easy to overlook: the higher the open interest, the more positions may be forcibly liquidated or stopped out when prices swing sharply. That’s why open interest is often seen as a measure of how crowded a contract is.
When open interest rises rapidly over a short period, subsequent volatility may intensify. Check your positions and liquidation prices first.
Today’s price: $BTC Current price 82346.01 (24h +0.81%).
This is not a recommendation to buy or sell in any form. Trade at your own risk.
If both sides of a trade are opening new positions, open interest rises; if both sides are closing positions, it falls; if one side opens a position while the other closes one, it stays the same.
One thing that’s easy to overlook: the higher the open interest, the more positions may be forcibly liquidated or stopped out when prices swing sharply. That’s why open interest is often seen as a measure of how crowded a contract is.
When open interest rises rapidly over a short period, subsequent volatility may intensify. Check your positions and liquidation prices first.
Today’s price: $BTC Current price 82346.01 (24h +0.81%).
This is not a recommendation to buy or sell in any form. Trade at your own risk.