Beyond Price: Understanding Open Interest Dynamics

Price tells you direction.
Volume tells you activity.
Open interest tells you commitment.

In my latest article, I explain how to interpret changes in total open interest in futures markets — and why looking at front-month contracts alone can distort the picture.

Inside, I cover:

  • The four key price + OI scenarios

  • How to distinguish new positioning from short covering

  • What rising total OI says about leverage and squeeze risk

  • Why falling OI often signals deleveraging and regime shifts

  • How to properly track total OI and volume across maturities

Open interest doesn’t predict direction — it reveals participation and conviction. And that often determines whether a move is sustainable or fragile.

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