Buxton ND | Ka Ching - 1/29/2016 16:32
here is what i don't understand if they sold the market it should have gone down and when they want to get out they have to buy so it should go up .so what am I missing on todays action?
This mite help Ching, for every buyer there is a selling.
You sell me 10 lots of beans, I buy 10 lots or contracts OI - open interest goes UP 10
Both you and I exiting 5 of these positions OI going DOWN 5
Hedge funds sell 50 lots and a big bank buys 50 - OI up 50
Then commercial X buys 40 to cover (hedge) a sale to China with a index fund taking 40 short side OI up 40
So we have 100 contracts of open interest.
Think of it as a Co-op's year end balance sheet report EVERYTHING must balance, just the way it is.
Asset and liabilities must balance.
Long and shorts must balance.
The big difference is NEW longs or shorts being add while OLD positions whether long or short are being liquidated. I understand it but have a hard time explaining it and at times one just has the chalk it up to "its just the way it works"
Its kinda a cluster mess and maybe I'm not explain it right so any and everyone fell free to jump in here ! ! ! ! !
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