Short Built-Up...!!!

In our previous post we have already cleared change in open interest should be interpreted in different ways and not with simple statistics that fall in price is profit booking or increase in prices are short covering. 

Any way in this post Let's try to understand terminology Short Built-Up 

Ideally short built-up happens with sudden fall in prices with huge or abnormal increase in open interest and ends with minor upward movement in price and decrease in open interest. 

Please note volumes in derivative space is secondary aspect.  

Lets see first chart short Built-Up has taken place. 

In above chart we can see short Built-Up has taken place. (click on image to see incase of any issue) 

Lower panel bars are open interest and not volumes. We can see that with huge red candle (with arrow mark) there is also sudden spurt in open interest. 

Also by the end of chart or at last bar we can see after prices turned up and also there is significant decrease in open interest. 

This is how shorts are built and liquidated thereafter. 

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Please note this blog post is for education purpose only. While utmost care is taken while writing this post but any human error cant be ruled out and we apologize for same in advance.