Open Interest: The Conviction Metric
Open interest (OI) represents the total number of outstanding contracts in a market. Unlike volume (which counts every buy and sell), OI measures how much capital is committed to positions. Rising OI means new money is entering the market; falling OI means positions are being closed.
What High OI Tells You
Strong conviction: A market with $500K in open interest has serious capital committed to its outcome. Participants have done their research and are willing to lock up funds until resolution.
Better price discovery: More outstanding positions means more eyes on the market, and more participants ready to trade on new information.
Lower manipulation risk: It's expensive to move prices when there's substantial OI on the other side.
Liquidity: The Execution Metric
Liquidity measures how easily you can enter and exit positions without moving the price. Key indicators include:
Bid-ask spread: Tight spreads (1-2¢) mean high liquidity. Wide spreads (5¢+) signal thin order books where your trade will cause slippage.
Order book depth: How much volume sits at each price level. A market with $10K at the best bid can absorb larger trades than one with $100.
Using OI and Liquidity Together
The most attractive markets combine high OI (conviction) with high liquidity (executability). A market with $1M OI but a 5¢ spread is hard to trade efficiently. A market with $10K OI but a 1¢ spread will be easy to enter but may not have meaningful price discovery.
PredRadar's Metrics
Every market on PredRadar shows OI, volume, and liquidity data when available. Use the Explore page to sort by these metrics and find the best-quality markets for your trading style. The Stats tab on each market page provides detailed breakdowns.