Understanding open interest

Open interest measures outstanding derivative positions. Every open contract has a long and a short. It does not identify which side initiated a trade or which traders hold a particular view.

Units change the interpretation

Contract or coin quantity and USD notional are different measurements. USD-valued open interest can change when price changes even if outstanding quantity does not. Check the unit before describing an increase as new positions or an inflow of money.

Price and OI together can motivate a hypothesis, but cannot by themselves distinguish new longs, new shorts, covering, liquidation or trader conviction.

Research velocity: an unresolved unit discrepancy

The public OI velocity reference currently describes contract velocity. The implementation consumes USD-valued open interest without converting it through mark price before taking its fractional change. Its rank then transforms the magnitude of that change using rolling statistics.

Until the contract and implementation are reconciled, do not describe this feature as proof of changing contract counts, newly opened positions or directional positioning. Its ID and existing contract have not been redefined here.

Build a careful study

Read the positioning guide, record the units and coverage, and keep published liquidations distinct from all position closures. In the Research Workbench, inspect the exact proposed field before running a comparison. A large rank describes a measurement under that field’s rules, not the reason positions changed.