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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Forwards and Futures

Which statement about open interest in futures is correct?

Open interest is the number of outstanding futures contracts that have not been squared off or settled, counted once per long-short pair. It differs from volume, which measures contracts traded in a period.

  1. AIt is the total number of contracts traded during the day
  2. BIt is the total number of outstanding unsettled contracts, counted once per long-short pairCorrect
  3. CIt is the sum of long and short positions counted separately
  4. DIt is the value of margins collected

Explanation

Open interest counts outstanding contracts once, since each contract has one long and one short. Volume is traded contracts, not open ones.

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