Why is open interest on options an important metric for cryptocurrency traders?

1 answers

• Mar 22, 2022 · 3 years ago
  As a cryptocurrency trader, open interest on options is a metric that I pay close attention to. It helps me understand the level of market interest and sentiment towards specific cryptocurrency assets. When open interest is high, it indicates that there is a strong demand for options contracts, which can lead to increased liquidity and tighter spreads. This makes it easier for me to enter and exit positions at favorable prices. On the other hand, low open interest may indicate limited market interest and lower liquidity, which can result in wider spreads and less favorable trading conditions. By monitoring open interest, I can better gauge market sentiment and make more informed trading decisions.
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