Open interest is the total number of contracts in a market that have been opened and not yet closed, settled, or expired.
Last reviewed 18 November 2025 · Educational, not advice
Open interest counts how many contracts are live in a market right now. A contract is added to open interest when a new position is created, and removed when that position is closed, settled, or the market expires. The futures regulator in the United States, the Commodity Futures Trading Commission, defines open interest as the total number of contracts entered into and not yet offset by an opposing transaction or fulfilled by settlement (as of November 2025).
Every contract has a buyer on one side and a seller on the other, so the total of all long positions always equals the total of all short positions. That balance is why open interest is a single clean number for the whole market rather than something that differs by side.
Open interest is often read as a gauge of how much attention and money a market has drawn. Rising open interest means new positions are being opened, which can point to fresh participation. Falling open interest means positions are being closed, which can point to people stepping away as an event nears its resolution.
It also gives a rough sense of depth. A market with high open interest tends to have more participants standing ready to trade, which often means tighter spreads and less slippage when you enter or exit. A market with very low open interest can be thin and harder to trade at a fair price. Open interest is not a forecast. It tells you how busy a market is, never which way it will resolve. The price, not the open interest, is what carries the implied probability.
A new market opens with no positions, so open interest is zero. You buy 100 yes contracts from a participant who is creating a fresh short position. Both sides are new, so open interest rises by 100.
Later you sell those 100 contracts to a different participant who is opening a new position. The contracts simply changed hands, so open interest stays at 100 even though a trade took place. If instead you sold back to someone who was closing their own short, both positions would be retired and open interest would fall to zero. This is why volume and open interest move differently.
Understanding how these markets work does not make trading safe. Prediction markets can lose you money, and a confident price can still be wrong. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
Volume is the number of contracts traded over a period, such as a day. Open interest is the number of contracts currently outstanding at a point in time. A market can show high volume but low open interest if traders open and close positions within the same session.
No. Open interest measures how many contracts are committed, not the probability of an outcome. The price reflects implied probability. Open interest tells you about participation and depth, not about which way a market will resolve.
It is a rough guide to how deep and liquid a market is. Higher open interest often goes with tighter spreads and less slippage, though that is not guaranteed. A market with very low open interest can be hard to enter or exit at a fair price.
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