Open Contracts

Definition ∞ Open contracts, also known as open interest, refer to the total number of derivative contracts, such as futures or options, that have not yet been closed or settled. This metric represents the total amount of outstanding positions held by market participants. A rising number of open contracts indicates increasing participation and liquidity in the derivatives market. It provides insight into market depth and potential future price movements.
Context ∞ Crypto news frequently reports on open contracts for Bitcoin and other major digital assets to gauge market activity and trader sentiment in the derivatives space. High open interest can signal strong conviction among traders, but also potential for increased volatility if many positions are liquidated simultaneously. Understanding open contracts helps observers analyze the speculative aspects of the digital asset market.