Wei Pingcang He Yue

In the futures or options market, open contracts refer to the number of "open" contracts bought or sold unilaterally at the end of the day. A futures contract is "terminated" because the contract expires, the goods are delivered, or the responsibility is terminated by reverse operation, which is called liquidation. The option contract can be "terminated" due to the expiration of the contract, the holder's exercise of rights or the termination of liability through reverse operation. Open contracts are one of the important reference data for analyzing futures and options markets. Open positions are mainly for the trading of pure futures. You may know that there is a time limit for the delivery of futures. According to CME futures, it takes 3 months for each trading position to be delivered, and it is impossible for buyers who are selling and buying now to wait 3 months to close their positions. How can we protect the existing profits from being returned? So while keeping the previous contract, we re-purchase a new contract with the same quantity but in the opposite direction. We call it hedging. The clearing institution of the exchange records that all the hedged contracts do not need to be tracked and liquidated every day, and only the contracts without hedging are liquidated every day. This non-hedging contract is "openlnt"!