37. Technical Terms You May Have Heard

This chapter is a brief outline of the other terms you may have heard used with technical analyses. Do you need to know them? Not now. Consider this a quick reference guide.

Open Interest

Open interest is simply the number of outstanding futures (or options) contracts for a particular commodity. In the futures markets, when one trader buys a futures contract, another trader necessarily sells one contract. In this so-called “zero sum game,” for every winner, there is a loser. When the stock market crashed in 1987, many traders who bought stock index futures were bankrupted. However, these traders had to have bought their positions from somebody, and those sellers collectively made a fortune. ...

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