$JCT 15-minute contract open interest rose 4.21%; the price was down 1.92% over the same period.
Let’s use this figure to break down open interest.
Every new position necessarily has both a long and a short, so the idea that “increasing open interest means the market is bullish” is a common misconception.
Open interest often drops rapidly after sharp volatility, indicating that a significant amount of leverage has been flushed out. Short-term sentiment can sometimes cool down as a result.
Learning to read indicators is easy; the hard part is sticking to the rules when the market gets heated.
Let’s use this figure to break down open interest.
Every new position necessarily has both a long and a short, so the idea that “increasing open interest means the market is bullish” is a common misconception.
Open interest often drops rapidly after sharp volatility, indicating that a significant amount of leverage has been flushed out. Short-term sentiment can sometimes cool down as a result.
Learning to read indicators is easy; the hard part is sticking to the rules when the market gets heated.