Open interest (also known as open contracts or open commitments) refers to the total number of derivative contracts, like futures and options, that have not been settled in the immediately previous time period for a specific underlying security. A large open interest indicates more activity and liquidity for the contract.
For each buyer of a futures contract there must be a seller. From the time the buyer or seller opens the contract until the counter-party closes it, that contract is considered 'open'.
Read more about Open Interest: Use of Open Interest in Technical Analysis, The Importance of Open Interest, Benefits of Monitoring Open Interest, Open Interest - A Confirming Indicator
Famous quotes containing the words open and/or interest:
“When strawberries go begging, and the sleek
Blue plums lie open to the blackbird’s beak,
We shall live well—we shall live very well.”
—Elinor Wylie (1885–1928)
“Shall the railroads govern the country, or shall the people govern the railroads? Shall the interest of railroad kings be chiefly regarded, or shall the interest of the people be paramount?”
—Rutherford Birchard Hayes (1822–1893)