Interpretation of open interest (OI) & price change of a stock
Based on open interest & price change data of a stock, the price trend of the stock is correlated as: Price Open Interest Price trend Increase Increase Increase (More buyers & long build-up) Increase Decrease Increase (Short positions covering) Decrease Increase Decrease (More short positions build-up) Decrease Decrease Decrease ( Long unwinding Buyers become sellers)