We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.

Key takeaways from this chapter

  1. Open Interest (OI) is a number that tells you how many contracts are currently outstanding (open) in the market.
  2. OI increases when new contracts are added. OI decreases when contracts are squared off.
  3. OI does not change when contracts are transferred from one party to another.
  4. Unlike volumes, OI is continuous data.
  5. 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.
  6. Abnormally high OI indicates high leverage. Beware of such situations.


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  1. Namrata says:

    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!

  2. Hreyaan Mahesh says:

    I’m truly grateful to the content that your team is providing, great job!
    God bless y’all 🙂

  3. Pawez Khan says:

    Thanks for such a nice and simply explained video

  4. Vidya says:

    Hi Karthik,

    Can we Sell Futures if we don’t have the holdings, I mean short selling is allowed?

  5. Chiragkumar Patel says:

    How long it takes to update OI?

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