Meaning and change example
Open interest refers to the stock of unsettled contracts, while trading volume refers to transactions during a period. A contract has a buyer and a seller, but they are not added as two independent contracts when open interest is counted. CFTC defines open interest through unsettled long or short contracts, not the sum of both sides.[1](#source-cftc-futures-glossary)
If two new participants open opposite positions in ten contracts, open interest increases by ten. If both close their previous opposite positions, it decreases. If one participant closes and another takes that side as a new position, the total may remain unchanged even though trades occurred.
What the indicator does not say
An increase in open interest does not mean that only buyers have entered the market or that the price must rise. The parties’ motives, hedging positions and available information are unknown. The exact date, contract term and report coverage are also needed.
The full example with three transactions and OBV limitations appears in the [volume and open interest guide](/guides/volume-open-interest/). [1] CFTC, Futures Glossary; definition of open contracts. ### Primary materials [CFTC Futures Glossary](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/CFTCGlossary/index.htm)