How Do Exchanges Use Open Interest Data for Risk Management Purposes?
Exchanges monitor open interest to gauge market depth, concentration of risk, and potential for systemic issues. High open interest concentrated in a few participants or at specific strike prices may prompt the exchange to adjust margin requirements or implement position limits to mitigate the risk of a disorderly market close-out.
Glossar
High Open Interest
Indicator ⎊ High Open Interest serves as a critical quantitative indicator of substantial market participation and the overall depth of capital committed to a specific cryptocurrency derivative contract.
Open Interest
Derivatives ⎊ Open interest, within the context of cryptocurrency derivatives and financial options, represents the total number of outstanding contracts that have not been settled or closed.
Open Interest Data
Data ⎊ Open interest data represents the total number of outstanding derivatives contracts, such as options or futures, that have not yet been settled or closed.