Just saw: Open interest in $SOPH 1-hour contracts rose 8.43%, with an open interest value of about $10.65 million; the price was up 27.62% over the same period.
People are always asking what open interest means. Here’s how I understand it.
Open interest reflects the overall size of contract positions: the higher the open interest, the more positions may be liquidated when prices move sharply.
A sharp drop in open interest often happens after a sudden surge or plunge, indicating that a lot of leveraged positions have been cleared out. Sentiment sometimes calms down afterward.
Don’t chase trades during the fastest-moving few minutes. Wait for the price action to play out before taking a look.
People are always asking what open interest means. Here’s how I understand it.
Open interest reflects the overall size of contract positions: the higher the open interest, the more positions may be liquidated when prices move sharply.
A sharp drop in open interest often happens after a sudden surge or plunge, indicating that a lot of leveraged positions have been cleared out. Sentiment sometimes calms down afterward.
Don’t chase trades during the fastest-moving few minutes. Wait for the price action to play out before taking a look.
