What Is Open Interest in Futures?

What is open interest? It is the number of futures contracts that are still open: entered into and not yet closed out by an opposite trade, by delivery or by exercise (CFTC explanatory notes). Every contract has a buyer and a seller behind it, so across the market the longs always add up to exactly the shorts.

That is why open interest tells you how much is at stake in a market, and nothing about direction. Where net positioning tells you which way one group leans, open interest tells you how big the whole market is. Each currency’s page, such as the British pound COT report, prints the leveraged funds’ net position as a share of it every week; every currency is on COT report for forex.

How contracts open and close

Open interest only moves when a position is created or ended:

• A new buyer trades with a new seller. A contract is born, and open interest rises by one.
• Someone closing a long trades with someone closing a short. The contract is gone, and open interest falls by one.
• A new buyer takes over from a long who wants out. The contract changes hands, volume goes up by one, and open interest stays where it was.

So a price can rise because new money is buying, or because people who were short are buying back to get out. The chart looks the same either way. Open interest tells the two apart.

A real week: the euro in March 2025

In the week to Tuesday 11 March 2025, the euro rose from $1.053 to $1.093 at the Federal Reserve’s noon rates (Fed H.10). Open interest in euro futures rose by about 46,000 contracts, to about 730,000 (CFTC TFF data). At €125,000 a contract, that is roughly €5.7 billion more in open contracts than a week before.

A rising price with rising open interest means positions were being opened as the price moved. The obvious guess is hedge funds piling in. The report says otherwise:

• Dealers added about 36,000 short contracts.
• Asset managers added about 9,000 longs and cut their shorts by about 18,000.
• Leveraged funds’ net position moved by about 2,000 contracts.

The group most forex traders watch hardly moved in a week when the market grew by 46,000 contracts. You only see that by putting open interest next to the groups.

The opposite pattern, a rising price with falling open interest, means the move comes mostly from old positions closing, often shorts buying back. That buying stops when the shorts run out, because nobody new came in.

For the leveraged funds, the record only half supports the short-covering story. From June 2006 to October 2026, in seven currency futures, the currency rose against the dollar while open interest fell in about one week in five, 1,492 weeks in all. The funds’ shorts fell in 72% of them, but their longs fell in 68%. Their net position rose in only 53%, less often than in weeks when the price and open interest rose together (59%).

That compares the Federal Reserve’s noon rate on each report Tuesday with the week before (Fed H.10), against open interest and the leveraged funds’ longs and shorts in the CFTC TFF data. In about half of those weeks the funds cut their longs and their shorts at once, rather than only buying back shorts. Falling open interest tells you positions are closing; which ones, only the groups’ own lines say.

Open interest in the COT report

Open interest is what makes a group’s position comparable. A net long of 100,000 contracts means something different in a market with 300,000 contracts open than in one with a million, to take two invented markets. Read as a share of open interest, a position compares across years and across currencies.

The CFTC prints that share for every group. On 21 January 2025, asset managers held 55.8% of all euro longs, and leveraged funds held 17.7% of all euro shorts. How the share of open interest helps judge a crowded trade is in COT Data Reversals.

What open interest does not say

• Reading it as bullish or bearish. Every new contract adds a long and a short, so rising open interest on its own favours neither side. It means something next to the direction of price and each group’s position.
• Confusing it with volume. Volume counts contracts traded; open interest counts contracts still open. A busy day that leaves open interest flat was positions changing hands, not new money arriving.