Volume = # of contracts traded on a particular day Open interest = # of contracts that have been opened but not closed OI is a signal of future volume - if a lot of positions are open, those positions have to be closed at some point which means future volume.
ICE bitcoin volumes have begun a solid uptrend, but open interest hasn't kept up. To me this signals short term speculation activity rather than long term hedging:pic.twitter.com/21YpziGu1a
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As a side note, trading volume-to-open interest ratio is a measure observed by Chinese exchanges to determine if there is ‘overspeculation’ & they need to intervene to clamp down on what they deem unproductive financial activity; I also discuss this here:https://www.tandfonline.com/doi/full/10.1080/03085147.2020.1718913 …
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Thanks - will be sure to give it a read.
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