Open Interest

Open interest is the total amount of active, unsettled contracts in a market. In derivatives or prediction markets, it helps show how much exposure remains open rather than closed out. Rising open interest can indicate growing participation, while falling open interest may suggest traders are reducing exposure. Unlike trading volume, which measures the total number of transactions over a specific period, open interest measures the net number of outstanding contracts. In crypto derivatives markets, high open interest indicates that there is significant capital committed, which can increase volatility when large liquidations occur. Analysts monitor open interest alongside price and volume trends to gauge market momentum and detect potential breakout signals.