Question

Please fill the columns of Volume and Open Interest based on the daily trading data given in the table below. DayTrading Activities Volume A buys 4 futures and D sells 4 futures J buys 6 futures and C sells 6 futures C buys 3 futures and A sells 3 futures D buys 1 futures and C sells 1 futures K buys 4 futures and J sells 4 futures M buys 3 futures and K sells 3 futures

Answer 1

Before attempting to reach to the numerical calculations, its vital to have the right definitions in place.

1. Open Interest: This is not linked to the general term "interest", which we use in finance. Open Interest primarily helps us know the sum total of all outstanding( or open) contracts held by key acitivity holders in the market. 2. Volume: Trading volume helps us know the number of contracts bought or sold in the market.

DAY 1: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 4 futures are bought and 4 are sold, the volume is 4. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

DAY 2: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 6 futures are bought and 6 are sold, the volume is 6. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

DAY 3: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 3 futures are bought and 3 are sold, the volume is 3. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

DAY 4: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 1 futures are bought and 1 are sold, the volume is 1. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

DAY 5: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 4 futures are bought and 4 are sold, the volume is 4. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

DAY 6: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 3 futures are bought and 3 are sold, the volume is 3. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

DAY 7: Lets remember the key principle that for every 1 buy and 1 sell, the volume adds upto 1. Hence, since the 2 futures are bought and 2 are sold, the volume is 2. The transaction doesnt create any new contracts, hence, Open Interest(OI) = 0.

Thank you!