Open interest (OI): what it is and how to read it
Open interest (OI) is the total number of open contracts on a market that have not been closed yet. Volume shows how much was traded over a period; OI shows how many positions are currently outstanding. Both are useful, but they say different things.
How OI is counted
Every futures trade has two sides: a long and a short. OI counts them as one contract. OI changes like this:
- it rises when a new buyer and a new seller open positions — money is coming into the market;
- it falls when both sides close their positions — money is leaving;
- it does not change when a position simply passes from one participant to another (one closes, another opens in their place).
OI and volume are not the same
Volume grows with any trade, including endless “open–close” within an hour; by the end of the day OI may not have changed at all. Volume is activity, OI is accumulated positioning. The volume-to-OI ratio shows how fast positions turn over: a high ratio means a lot of short-term trading, a low one means positions are held for long.
Units: contracts, coins, dollars
Exchanges report OI differently: in contracts, in coins or in dollars. To compare two exchanges, bring it to one unit — usually dollars: OI in coins × price. Contract size differs between venues (see the guide to perpetual futures), so raw numbers cannot be compared without conversion.
The “price + OI” combination
| Price | OI | What it usually means |
|---|---|---|
| rising | rising | new buyers are joining the rally — the move is fed by fresh money |
| rising | falling | the rise comes from shorts closing (a short squeeze), no new money — the move is weaker |
| falling | rising | new shorts are joining the decline — seller pressure is growing |
| falling | falling | longs are closing (including liquidations), overheating is being flushed out |
OI and funding
If the funding rate is far above normal while OI is high and rising, many participants have opened longs and are paying for it. Such a “crowded” market is vulnerable: when the price reverses, longs close in an avalanche of liquidations. For an arbitrageur this is a signal of both income (a high rate) and risk (the rate can drop fast or the market can move sharply). How to read the rate itself is in the guide to the funding rate.
Why an arbitrageur cares about OI
- Judging market depth. The higher the OI and turnover, the easier it is to open and close a position without noticeably moving the price. A coin with tiny OI on one of the exchanges means a risk of a bad exit.
- Checking the market is alive. A contract with zero or almost zero OI often trades “on paper”: the spread is visible in a table but cannot be executed.
- Limits. Many exchanges cap a position at a share of OI or at an absolute limit — worth checking before entering a large size.
- Squeeze risk. For small-cap coins with large OI the price easily knocks positions out in one direction.
How SpreadScope uses it
The scanner does not show open interest as a separate figure in its interface. It does have the “Volume, $” filter — the minimum volume in the first five orders of the book — and the “Limit, $” filter — the minimum position limit — which cut pairs on “empty” markets and on venues with strict caps. To compare markets by OI, open the coin’s page on the exchange itself. See also arbitrage risks.