What is the Full Form of OI in The Share Market?

The OI Full Form in Share Market is Open Interest. It explains the number of contracts for futures or options that are extant but not closed out. Now, imagine, one buyer and one seller come to start a new contract. That means we add one to the count of open interest. If that buyer and seller close their contract and walk away, then we will have to subtract one from the count. It is very important to understand that this open interest figure increases as and when the initiation of new trades takes place, while it decreases due to the closing of old ones.

Interpretation and Importance of OI

Open Interest, OI, sheds some light on what people are feeling about the market and whether the price direction of shares is growing stronger or weaker. As an example, if the price of a share is going up and so is the OI, this is pointing to a bullish scene where it seems the uprise in buying might just continue. If the share price and OI both fall, it is an indication that sellers start to withdraw, and in all likelihood, this would point to the fact that the trend may be about to lose its power or even reverse.

Difference Between OI and Volume

See, Volume is simply the number of times that trade occurred on a given day and restarts at the beginning of each new day of trading. On the other hand, OI keeps the number of contracts still in play and doesn’t start over on a daily basis.