Increasing Open Interest = Larger Capacity for Systematic Alpha generation

Open interest (OI) is the number of outstanding derivative contracts that remain open. It is not volume, and it grows or shrinks only when positions are initiated or closed.

In practice, traders use OI alongside volume and spreads to gauge depth and liquidity. More OI usually means more counterparties, tighter execution, and lower slippage.

Open interest ≠ volume.

  • Volume counts trades executed over a period.

  • Open interest counts currently active contracts.

Last updated 12 hours ago

PreviousTypes of Systematic Alpha present on Perp DEX’sNextHow higher OI helps funding rate arbitrage capacity?