Friday, November 26, 2010

interpreting change in open interest

when a stock falls on increase in open interest, go short

when a stock rises on increase in open interest, go long

when a stock falls on decrease in open interest, unwind long but wait for shorting

when a stock rises on decrease in open interest, cover shorts but wait for going long

if you couple this information with put/call ratio, the results can be amazing!

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