$IDOL 15-minute contract open interest increased by 3.73%, with an open interest value of approximately $13.82 million; the price fell 23.89% over the same period.
How is this figure calculated?
For every new position, someone must be going long and someone else must be going short. So the idea that “rising open interest means a bullish outlook” is a common misconception.
A rise in price with falling open interest is generally interpreted as being driven by short covering, while a fall in price with falling open interest is generally interpreted as longs closing their positions. These are all hypotheses, not conclusions.
Indicators can be inaccurate, so don’t skip your stop-loss: deciding in advance what to do if your analysis is wrong is more important than guessing correctly.
How is this figure calculated?
For every new position, someone must be going long and someone else must be going short. So the idea that “rising open interest means a bullish outlook” is a common misconception.
A rise in price with falling open interest is generally interpreted as being driven by short covering, while a fall in price with falling open interest is generally interpreted as longs closing their positions. These are all hypotheses, not conclusions.
Indicators can be inaccurate, so don’t skip your stop-loss: deciding in advance what to do if your analysis is wrong is more important than guessing correctly.
