Open Interest (OI) limits (WEB) are the maximum allowed open interest for a particular derivative contract. These limits ensure market stability by preventing excessive concentration of positions.
Brokers must adhere to these position limits in addition to complying with exchange-mandated initial margin requirements. Open Interest (OI) indicates the total number of outstanding futures or options contracts in the market.
- Client-wise limit: 5% of the total number of all derivative contracts for the same underlying.
- Trading member limit: 15% limit on open interest for brokers.
You can learn more about open interest by visitng Open Interest module on Varsity by Zerodha.