|
PureBytes Links
Trading Reference Links
|
I've always found open interest somewhat difficult to interpret - kind of a
double-edged sword. On the one hand, rising open interest represents the
creation of new contracts by selling futures into the market with the
expectation of buying them back at a lower price or a willingness to deliver
the physical. On the other hand, rising open interest represents a pool of
contracts which must be covered by buying or by delivery of the physical. I
would assume that your description of a market going sideways on rising open
interest indicates that a group of buyers has placed a floor under the
market and are willing to buy whatever new contracts are offered?
Earl
-----Original Message-----
From: OatTrader@xxxxxxx <OatTrader@xxxxxxx>
To: Omega-list@xxxxxxxxxx <Omega-list@xxxxxxxxxx>
Date: Sunday, April 04, 1999 2:45 PM
Subject: Re: Volume?
>RT's,
>
> The only good I see in open interest that I find as useful is when a
>market is drifting sideways to down and the open interest starts to rise.
>This is telling me that the commercials are starting to accumulate long
>positions in earnest. An example would be starting in December in Soybean
Oil
>the open interest is starting to rise and it is obvious that prices are
still
>declining. This same rise occurred in Soybeans in July 1998 to October
1998,
>prices had gone down and the accumulation was on and prices rallied 75
cents.
>Oat
>
|