In view of the related concepts and definitions of opening positions, Bian Xiao introduces them in detail here. I hope the following information can help you and learn more about the stock market before you can succeed. Details are as follows:
Open contracts refer to the number of contracts held by multiple parties or shorted by short sellers in a specific market at the end of a trading day.
Represents the number of contracts existing in the market at that time, and the open position is equal to the long headquarters position or the short headquarters position.
Buyers and sellers of futures or options must wait until the first notice date if they want to accept delivery or make delivery (this is not necessarily the case with options, but mostly with index options). This waiting period can ensure that the number of long and short contracts must be equal.
However, traders in futures and options rarely want to accept or enter delivery, and most of them want to close their positions before the first notice date.
Open positions will increase or decrease when new traders enter the market or existing traders enter the market. Only when the new buyer completes the transaction with the new seller will the open position increase. In other words, the transaction between them will constitute a new contract.
Referring to the above figure, opening a position represents the number of bulls or shorts in a futures or options market, and opening a position can show the conflict intensity between bulls and shorts.
The increase of short positions means that the conflict between long and short positions is more acute, and the existing trend will continue to develop. Open positions will increase in price increases, and bulls can overweight (points A and D). Opening a flat position shows that losers are unwilling to enter the market, and the existing trend is beginning to age. Take profit or adjust the stop-loss price (points B and E). The decrease in open positions means that winners and losers leave one after another, and the trend is coming to an end. Without fuel, the fire can't last. Opening positions decreases with a certain trend, which is a signal that the trend is about to reverse.