I'm in a pickle here as I'm thinking about the open interest and about the bid - ask process. Ok here it goes: When does open interest go up or down? Let's say that I buy 1 contract in may crude. Does open interest go up by 1? This to me makes no sense because of the bid - ask process. Every time you enter a contract the exchange is on the other side of the trade, who is setting the bid and ask then, the exchange? Do they act as market maker? Or are you buying from traders everywhere, in which case the open interest stays the same, but the volume goes up by 1 as a contract was flipped from one trader to another. In that case, when does the magic open interest change? Is someone who is making a physical delivery "selling" a contract the same as me shorting a contract? I think it is but how do they enter the market?