Open Interest

[TraderJOE]

I wanted to get some input on Open Interest.

I attached a chart for (Crude) that two continous contracts and the nex two months out.

I am not clear on why open interest plots as it does, and what chart does one look at to understand if open interest is really rising or not?

CL #F: OI drops at each month, I know this is based on the roll over.

CL 1!: OI Acts as the current front month (CL Z1 in this case)

CL Z1: Front Month OI is dropping folks moving to next contract month.

CL F2: Next month OI increases.

If one wants to see if OI is following price, in this case Crude is trending up and CL F2 OI is trending up.

Is the only way to analyze OI by not looking at continous contracts but going out a couple of months to really get an idea if OI is supporting the trend?

[eostrom]

I suggest looking at CL 1!, so that you are always looking at the front month. You could also use CL 2! if you wanted to see the second month out to compare the 2 as rollover comes up. Let me know if this helps.