Open Interest (OI) is the total number of open (unsettled) futures and options contracts. On FYERS, OI is best used with price and volume to understand participation, gauge trend strength, and spot sentiment shifts in F&O.
OI counts active derivative contracts. When a new long and a new short are created, OI increases by 1; when a long and short close, OI decreases by 1. Unlike volume (which resets daily), OI carries forward and reflects positioning and conviction.
• Price ↑ + OI ↑ → Fresh long build-up; bullish continuation bias.
• Price ↓ + OI ↑ → Fresh short build-up; bearish continuation bias.
• OI ↓ (with either price direction) → Position unwinding/profit-booking; trend may be tiring.
OI can move before price when participants start building or exiting positions in anticipation. Sharp OI changes with muted price often foreshadow a breakout, breakdown, or reversal.
• Price ↑ + Volume ↑ + OI ↑ → Strong continuation (fresh participation).
• Price ↑ + Volume ↓ + OI ↓ → Possible short-covering pop or trap; conviction unclear.
• Price flat + OI ↑ → Accumulation/distribution; watch the range edges.
• Price ↓ + Volume ↑ + OI ↑ → Shorts adding; weakness may persist.
Notes
• Do not trade on OI alone. Confirm with structure (higher highs/lows or lower highs/lows), volume, and higher timeframe.
• Event/expiry days can distort OI (policy days, results, index rebalancing, weekly/monthly expiry).
• For options, read OI with strike (ITM/ATM/OTM), time to expiry, and IV; deep-OTM OI can mislead. Price ↑ + OI ↓ usually indicates short covering that can fade after the initial surge.
| Scenario | Solution |
|---|---|
| OI increases but price stays flat | Mark the range; prepare for a confirmed breakout/breakdown (close outside range with rising volume). |
| OI drops while price rises | Treat as short covering; trail tighter and add only if the next consolidation resolves higher with OI stabilizing or rising. |
| Sharp OI rise right below resistance | If price breaks out with OI ↑, bias continuation; if rejected and OI stalls/falls, consider a defined-risk fade. |
| OI falls into a known support zone | If breakdown fails and OI stabilizes, look for a tactical bounce; wait for confirmation before entering. |
| Option OI clusters shift (e.g., CE max OI moves 22,000 → 22,200) | Re-anchor bias near the new high-OI strikes and reassess risk around the shifting “walls.” |