We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.
Key takeaways from this chapter
- Open Interest (OI) is a number that tells you how many contracts are currently outstanding (open) in the market.
- OI increases when new contracts are added. OI decreases when contracts are squared off.
- OI does not change when contracts are transferred from one party to another.
- Unlike volumes, OI is continuous data.
- On a stand-alone basis, OI and Volume information does not convey information; hence it makes sense always to pair it with the price to understand the impact of their variation.
- Abnormally high OI indicates high leverage. Beware of such situations.
Great video Team Zerodha! I went through the entire video series on ‘Futures’ and I must say you guys have done a fantastic job of explaining Futures. I had read about these concepts in books, articles and even some videos. But what differentiates your videos is clear information, simply and confidently presented by Prateek with excellent graphics. Take a bow guys!
Thanks, Namrata! Glad you liked the content 🙂
I’m truly grateful to the content that your team is providing, great job!
God bless y’all 🙂
Happy learning!
Thanks for such a nice and simply explained video
Glad you liked it, Pawez. Happy learning 🙂
Hi Karthik,
Can we Sell Futures if we don’t have the holdings, I mean short selling is allowed?
Yes, you can sell/short futures.
How long it takes to update OI?
NSE does this real time I believe.