Open Interest
OI · Open contracts · Open commitments
The number of futures contracts that have been opened and not yet closed or settled; one long matched with one short counts as one contract.
Simple explanation
Background: Korea's won exchanges have no futures market, so open interest is a figure Korean investors read from overseas futures exchanges such as Binance, usually next to funding rates. In Korean it is 미결제약정, "unsettled contracts".
Every futures contract is created by a buyer (long) and a seller (short). Open interest counts the contracts that are still open, not yet offset by an opposite trade or settled at expiry. One long and one short make one contract, not two. Across the market, long open interest and short open interest are therefore always equal, and open interest alone cannot tell you which side is bigger.
How a trade changes it depends on whether each side is opening or closing. Two traders both opening new positions add one contract. One opening while the other closes only changes the owner, so open interest stays the same. Two traders both closing remove one. A liquidation closes a position too, so it also lowers open interest.
It is not trading volume. Volume adds up every contract traded over a period; open interest is what is still open at one moment. A contract that changes hands ten times in a day adds ten to volume and nothing to open interest. Exchanges and data sites show it in coins or in dollars, and the dollar figure grows whenever the price rises, so check it against the coin count.
Read it together with price. Rising price with rising open interest is usually taken as new money backing the move. Rising price with falling open interest can mean the rally is driven by shorts buying back, through stop-losses or liquidations, rather than by new buyers. Flat or falling price with rising open interest can mean shorts are building up, and falling price with falling open interest often means longs are being closed or liquidated.
Funding rates show which side is crowded. Rising open interest with a strongly positive funding rate means longs are paying up to stay in, so a small drop can set off a chain of long liquidations. Rising open interest with negative funding means shorts are crowded, and a rise can turn into a short squeeze. These are tendencies, not forecasts: open interest does not tell you where the price will go.
Each exchange reports its own figure. Totals across exchanges come from data providers, which cover different exchanges and calculate differently, so their numbers differ a little. Record-high open interest also means a lot of leverage in the market, and a sharp move often comes with cascading liquidations and a sudden fall in open interest.
When open interest collapses overseas in a liquidation cascade, overseas prices move first and Korean prices follow with a lag, so the kimchi premium can briefly jump or flip into a reverse premium. If funding and open interest show the mood of the overseas futures market, the kimchi premium shows the mood of Korea's spot market. CoinGaja does not show open interest, but its Kimchi Premium Index and heatmap show how the gap between Korean and overseas prices moves at such moments.
Example
A opens a long and B opens a short on 1 bitcoin futures contract → open interest 0 → 1 (one long + one short = 1 contract)
A closes the long by selling 1 contract to C, who opens a new long → only the owner changes → open interest stays 1, volume so far 2
C (closing the long) and B (closing the short) trade 1 contract → open interest 0, volume so far 3
Open interest 10,000 BTC × price $100,000 = $1 billion (about ₩1.4 trillion at ₩1,400)
The price rises 5% to $105,000 with the coin count unchanged → $1.05 billion (+5%, from the price, not from new contracts)
If the count falls from 10,000 to 9,000 BTC (-10%) during that 5% rise → short covering and liquidations, rather than new buying, may be driving the rally
※ Example numbers, for illustration only
See it on CoinGaja
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