$BIRB 1-hour contract open interest increased by 13.35%, with the value of open positions at around $2.79 million; the price rose 4.42% over the same period.
Let’s break down open interest based on this data.
Every new position necessarily involves both a long and a short, so the idea that “a sharp rise in open interest means the market is bullish” is a common misconception.
When the price is basically flat but open interest rises sharply, it means both sides are adding to their positions. The likelihood of a larger move afterward is often higher, but its direction is hard to predict.
Keep enough margin for your contract positions so that one sudden move doesn’t wipe them out.
#BIRB
This is not trading advice.
Let’s break down open interest based on this data.
Every new position necessarily involves both a long and a short, so the idea that “a sharp rise in open interest means the market is bullish” is a common misconception.
When the price is basically flat but open interest rises sharply, it means both sides are adding to their positions. The likelihood of a larger move afterward is often higher, but its direction is hard to predict.
Keep enough margin for your contract positions so that one sudden move doesn’t wipe them out.
#BIRB
This is not trading advice.