Open interest and price divergence generally falls into three categories. For $ARIA , open interest is rising while the price is moving sideways this time (24-hour open interest +26.78%, price -1.03%):
▶ OI up, price flat: Long and short positions are both growing, suggesting a buildup phase; volatility may increase later
· OI up, price down: Often means new shorts are pressing the price lower, though crowded shorts can also get squeezed by a rebound
· OI down, price up: Often means short covering is driving the rise; its staying power depends on whether new money follows through
Open interest is currently about $5.65 million. What signals do you look for before making a move?
▶ OI up, price flat: Long and short positions are both growing, suggesting a buildup phase; volatility may increase later
· OI up, price down: Often means new shorts are pressing the price lower, though crowded shorts can also get squeezed by a rebound
· OI down, price up: Often means short covering is driving the rise; its staying power depends on whether new money follows through
Open interest is currently about $5.65 million. What signals do you look for before making a move?