$WAL 15-minute contract open interest rose 21.33%, with the value of open positions at approximately $7.77 million; meanwhile, the price was up 0.5%.
I used to think that an increase in open interest meant money was flowing in. Later, I realized that open interest counts outstanding contracts. Every contract has both a long and a short, so this figure doesn’t tell you where the money came from.
High open interest in itself is neither bullish nor bearish; it simply means more money is being wagered and the two sides disagree more strongly.
Keep extra margin on your contract positions—don’t let a single wick knock you out.
I used to think that an increase in open interest meant money was flowing in. Later, I realized that open interest counts outstanding contracts. Every contract has both a long and a short, so this figure doesn’t tell you where the money came from.
High open interest in itself is neither bullish nor bearish; it simply means more money is being wagered and the two sides disagree more strongly.
Keep extra margin on your contract positions—don’t let a single wick knock you out.