Ex-RB Short Term Traders

[Dimension]

possibly...

it's a little confusing when you think of it logically, maybe some rules or examples would help

-OI represents newly created contracts(bought or sold)
-OI INCREASES if the transaction results in a new contract. Since, a trade must consist of a buyer and seller, one buy to open + one sell to open will increase the OI by 1 (i.e. both the buyer and seller have interest in the same, newly created contract, one is LONG, and one is SHORT).
-OI DECREASES on closing of open contracts or exercising of those contracts. in the above example, if the Long now sells to close and the Short buys to close, the OI will decrease by one, since the contract is being settled/liquidated between the two offsetting orders.
-OI DOES NOT CHANGE if your trade does not result in opening of new contracts. Using the same example, if the Long sells to close, but someone else has on order to buy to open, and the two are matched, the OI is unchanged...in essence, the contract is just being passed on to someone else in this case.

So, the case where your SELL TO OPEN would not cause the OI to increase would be IF someone else was SELLING TO CLOSE at the same strike and same number of contracts that you are.

a bit confusing i know, but after awhile, it starts to make sense...a few shots might help :)