Open interest in options exchanges refers to the number of option contracts for which traders have opened buy (long) or sell (short) positions and have not yet settled.
A high open interest indicates a significant influx of capital into the options market and high interest among participants.
In options trading, an increase in open interest suggests that investors are confident in their market outlook and are holding onto their positions, potentially indicating that the price of the underlying asset may move in the direction anticipated by investors.
Conversely, a decrease in open interest means that investors are closing their positions, which could indicate a change in market outlook or increased uncertainty.
