What is open interest
Open interest is the total number of derivative contracts, such as futures or options, that have been opened and not yet closed, exercised or expired.
Every contract has a buyer (long) and a seller (short). Open interest counts each contract once, not once per side. It measures how many contracts are still outstanding. It does not count how many were traded, which is volume.
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Formal definition and how it changes
For a given contract, meaning one underlying, one expiry and, for options, one strike and type, open interest is the number of contracts held open at the end of a trading day, as recorded by the exchange or its central counterparty.
Whether a trade changes open interest depends on whether each side is opening or closing a position:
| Buyer | Seller | Effect on open interest |
|---|---|---|
| Opens a new long | Opens a new short | Rises |
| Opens a new long | Closes an existing long | Unchanged (the contract changes hands) |
| Closes an existing short | Opens a new short | Unchanged (the contract changes hands) |
| Closes an existing short | Closes an existing long | Falls |
Worked example (hypothetical)
Take a newly listed futures contract that nobody holds yet, so open interest is nil.
- Trader A buys a contract to open a long. Trader B sells it to open a short. A new contract now exists, and open interest goes up by that contract.
- Trader C later buys from Trader A, who is closing the long. The contract has only changed hands, so open interest stays the same. Volume still rises, because a trade took place.
- Trader B buys back the short from Trader C, who is closing the long. Both sides have closed, so that contract leaves open interest.
All three trades added to volume. Only the first and last changed open interest.
Where you see the term
- Exchange data pages and contract specifications. Futures and options exchanges publish daily open interest per contract and per expiry. In Pakistan, futures trading is supervised by the Securities and Exchange Commission of Pakistan (SECP), with trading in listed securities and commodities only via SECP-licensed securities and futures brokers.
- Options chains. Open interest is shown per strike and per expiry, next to volume.
- Positioning reports and market news. Commentary often describes open interest "building" or "unwinding" in a contract.
- Crypto derivatives sites. Open interest on perpetual futures is often quoted as a money value rather than a count of contracts.
Over-the-counter CFDs on a broker platform such as MetaTrader are not exchange-listed contracts, so they have no exchange open interest figure.
Edge cases for experienced readers
- Expiry. As expiry approaches, open interest in the front month usually falls while it rises in the next contract. This happens because of the futures roll. At expiry, the remaining contracts are settled, either in cash or by delivery, and leave open interest.
- Timing. Open interest is normally final only after clearing at the end of the day. Intraday figures, where shown, are estimates.
- Units. Compare like with like. Contract counts depend on contract size, and value-based figures move with price even when no position changes.
- Direction. Every long has a matching short. Open interest alone does not show which side is "winning" or which way price will move.
Leveraged derivatives can lose money fast. Open interest describes participation in a contract. It is not a signal to trade. See risk management.
Related terms
Derivatives, clearing and settlement, call option, contango, backwardation, exposure, and the full trading glossary.
Frequent questions
What is the open interest meaning in simple words?
It is the number of contracts that are still open, meaning they have not been closed, exercised or expired.
Is open interest the same as volume?
No. Volume counts every trade. Open interest counts only the contracts still outstanding, so a trade can add to volume without changing open interest.
What does open interest in futures show?
It shows how many futures contracts in a given expiry are still held by market participants, as reported by the exchange after the day's clearing.
Why does open interest fall near expiry?
Holders close their positions or roll them into the next expiry. Any contracts left at expiry are settled and drop out of the count.
Do forex CFDs have open interest?
Not in the exchange sense. CFDs are agreements with the broker, not exchange-listed contracts, so no exchange publishes open interest for them.