Personal Finance & Money Asked by Kanna Kim on August 8, 2021
so in binance trading data, I came across with this
where the open interest is falling but the notional value of OI is being steady.
my understanding is that Open Interests represents the number of unsettled contracts and notional value is like the total value of those contracts. So with that being said, shouldn’t the Notional Value of Open interest fall as Open Interest falling? what’s the difference between those two?
You're right about what the two represent. The main difference is that open interest reflects the number of contracts that are held by traders and investors in active positions that are ready to be traded, and notional value reflects a total value controlled by a position; how much value is represented by a derivative contract. Notional value distinguishes between the amount of money invested and the amount of money associated with the whole transaction. Open interest is what helps you determine whether there is high or low value
Answered by MNS213 on August 8, 2021
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