Question

we have discussed different scenarios/effects on the open interests when one futures contract is traded in...

we have discussed different scenarios/effects on the open interests when one futures contract is traded in the futures exchange. Please provide a detailed summary of these different scenarios below.

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Answer #1

Below is the detailed summary of different scenarios/ correlation of open interest when one future contract is traded in the future exchange:-

Price Volume Open interest Market
Rising Up Up Strong
Rising Down Down Weak
Declining Up Up Weak
Declining Down Down Strong
Market condition Impact
Bullish an increasing open interest in rising market
Bearish an declining open interest in rising market
Bearish an increasing open interest in falling market
Bullish an declining open interest in falling market
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