open interest in futures

This is a discussion on open interest in futures within the First Steps forums, part of the Reception category; My understanding of it is based on 4 possible cases for the trade to take place: a new long and ...

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Old Jan 15, 2009, 8:37pm   #1
Joined Dec 2008
open interest in futures

My understanding of it is based on 4 possible cases for the trade to take place:
a new long and a new short, +1 added to open interest
an old long and a new short , 0 added to OI
an old short and a new long, 0 added to OI
an old long and an old short, -1 added to OI

How do I access OI from the chart?

On level 2, price ladder, the volume traded at the price is given, but
is there a way to find out, what type of the 4 cases it is?

I would think that if +1 OI that would represent the strongest type
of volume, and -1 OI the weakest type of volume since both sides
of the trade are leaving the market, and thus any affect on price
would be relatively short lived.

If it matters, mention which broker/platform is used, since the interface
seems to be non-standard. The demo's I have tried had many flavors
of volume, but not a plain vanilla OI.

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Old Jan 15, 2009, 10:15pm   #2
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Joined Jan 2007
Entirely depends on platform I'm afraid.

Yes, open interest can be a very important indicator. For example, in Euroswiss STIR over the last week there had been a lot of suspicious looking indiscriminate buying. My initial hypothethis was that this was because someone had been given a 'tip' about impending interest rates (they usually are in switzerland). However... open interest (once I got ahold of the data) tells a different story by rapidly decreasing, suggesting that it is a short position being closed. It is my belief some organisation has been shut down buy their clearer as plenty of the buying was followed with blatant front running, which presumably would not be so likely a case as if it were a hedge being unwond... but then I am guessing here.
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Old Jan 16, 2009, 8:52pm   #3
Joined Dec 2008
rightbyleft started this thread thanks for the info arabianights
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