Understanding the meaning of the number of open foreign investment openings, understanding key indicators of investment market trends

What is the number of foreign investment unopened positions?

FDI number of open positions is an important market indicator in the Taiwan futures market. It refers to the number of foreign and onshore contracts that have not been cleared in the futures market. Simply put, how many futures contracts foreign investors currently hold in the market have yet to be sold or bought back.

This data is important because foreign investment plays a significant role in Taiwan's stock and futures markets. FDI's large capital size and well-established operating strategy, and changes in its position can often affect market movements, so tracking the number of FDI openings is an important basis for many investors to judge the direction of the market.

Fundamentals of Foreign Investment Unclosed Positions

What is an unopened position?

In futures trading, “Open Interest” refers to the total number of contracts that have not been settled in the market. When an investor buys a forward futures contract, if no reverse operation (sell) has yet to close a position, the contract is in an unclosed position.

For example:

• Investor A buys 1 spot index, which results in 1 open position
• WHEN INVESTOR A SELLS THIS 1-PORT INDEX POSITION, THE NUMBER OF UNCLOSED POSITIONS DECREASES BY 1
• If Investor A continues to hold unclosed positions, this 1 slot will continue to be counted in the unclosed position statistics

Why is foreign investment important?

The influence of foreign investment in the financial market in Taiwan is mainly due to the following reasons:

1. Huge size of funds: Foreign managed capital moves by billions or even trillions of dollars, and its buying and selling actions have a significant impact on the market
2. Professional Investment Team: Foreign investors usually have a complete research team and advanced analytical tools
3. Long-term investment perspective: Foreign funds are more focused on long-term trends compared to short line operations for retail traders
4. Avoidance requirements: In addition to speculative trading, foreign funds are also hedged with futures

How to interpret the number of foreign investment unfilled openings

Meaning of Plural and Empty

The number of open foreign investment positions is divided into “multiple” and “empty”:

Long Position

• Buy advanced futures contracts on behalf of foreign investors
• Multiple increments indicate how much foreign code is added
• A multiple reduction may be a gain or a shift in opinion to conservatism

Short Position

• Sell futures contracts on behalf of foreign investors
• An increase in vacancies indicates that foreigners see an increase in vacancy
• Reduction of empty orders may be a rebound or a shift in the view to optimism

The Importance of Net Positions

Net Position = Number of Multiple - Number of Empty Single Pits

The net position is a key indicator for determining the overall foreign investment attitude:

• NET MULTIPLE (POSITIVE): Foreign investment is biased overall, more single than empty
• Net Blank (Negative): Foreign investment tends to be empty overall, with more vacancies than plurals
• Net Position Reversed by Negative: Foreign investment attitude has shifted from being idle to more cautious, possibly a buy signal
• Net position from positive to negative: Foreign investment attitude has shifted from being seen to being empty, and risks need to be mindful

Real-life application of the number of unopened foreign investment openings

1. Determine market trends

Changes in the number of foreign currency unopened positions can help investors determine the trend of the big trades:

• Foreign Investment Continually Encoding Multiple: The market is in a bearish mood, usually accompanied by an increase in indices
• Foreign Investment Continues to Increase Vacancies: The market enters the empty phase as the corresponding index falls
• Foreign Net Positions Innovative High/New Low: It may indicate that the trend has entered an extreme state, so watch out for reversal risks

2. In-Stock Market Observation with

Analysis of the combination of the number of open positions in the futures market with the overbought amount in the spot market:

Consistency signal (more reliable)

• Futures Net Multiple Increase+Spot Buy Overbought: Strong Multiple Signals
• Futures net empty order increase+spot oversold: Strong bullish signal

Conflicting Signals (Caution Required)

• Futures net multiple increase+spot oversold: may be hedging or short line adjustment
• FUTURES NET EMPTY ORDER INCREASE+SPOT BUY OVERSHOOT: MAY BE LOCKING TO SPOT PROFITS OR STRATEGIC ACTION

3. Watch for reversal signals for extreme values

It is often a warning that the market is about to reverse when the number of unopened positions reaches historical extremes:

• New all-time high in net sales: The market may be overly optimistic and there is a risk of a rollback
• NET NET SALES RECORD LOW: The market may be overly pessimistic and there is a chance of a rebound

This phenomenon of “physical inverse” is called “backwardation” in technical analysis and is an important reversal signal.

Pipeline for querying the number of unopened openings for foreign investors

Official Data Sources

1. Taiwan Futures Exchange
   • URL：www.taifex.com.tw
   • Provides daily statistics for futures and options trading in the top 3 legal entities
   • The most complete and real-time data
2. Securities Counter Trading Centre
   • Provide statistics on the entry and exit of relevant entities
   • Cross-match spot and futures dynamics

Financial Information Platform

Many financial websites and apps offer foreign investment unclosed enquiries:

• Listing software offered by various bookmakers
• Financial news websites (such as Chuo Hang Network, XQ Global Winners, etc.)
• Professional Futures Information Platform

Precautions for Using Foreign Investment Unclosed Position Data

1. Avoiding Single Indicator Decisions

While the number of open foreign investment openings is important, it should not be the only basis for judgment. Recommended pairing:

• Technical analysis indicators (Averages, KD, MACD, etc.)
• Basic information (economic data, corporate reports)
• Crypto side of the market (financing of securities, main entry and exit)
• International market dynamics (US stocks, mainland stocks, exchange rates)

2. Understand the time difference

Futures unclosed data is usually data from the previous trading day and there is a time difference. The market may already have changed on that day, so it is necessary to watch the movement in real time.

3. Differentiate between hedging and speculation

The futures portion of foreign investment is not all for speculation, but also contains a lot of hedging needs. For example:

• Foreign investors hold large stocks of Taiwan stocks and may sell futures for hedging
• In this case, an increase in futures short orders does not necessarily represent a bearish market

4th. Consider the Choice Market

In addition to the layout of the futures market, foreign funds also use options to trade extensively. The full analysis should observe at the same time:

• Number of open positions in futures
• Volume of Options to Buy and Sell Unclosed
• Put/Call Ratio

Mapping Strategy for Foreign Unclosed Positions and Retail Traders

Strategy for Homoeism

For investors with lower risk tolerance, you can choose to follow the direction of foreign funds:

• Consider Low Deposits as the Net Foreign Fund Continues to Increase
• Reduce codes or watch empty-handed when foreign net orders continue to increase
• CONFIGURE STOP AND STOP PROFIT, STRICTLY ENFORCE VENTILATION CONTROL

Adverse Operational Strategies

For experienced investors, it is possible to operate in reverse at extreme values:

• When the net foreign exchange rate is high and the market is overheated, consider taking profits
• When foreign net vacancy innovation is low and markets panic, servo machines enter in batches
• This strategy is high risk and requires rigorous risk management

conclusions

The number of open foreign exchange openings is an essential indicator for observing the Taiwan futures market. By tracking changes in foreign investment positions, investors can more clearly understand the movements and market sentiment of the major market forces. However, any single indicator has its limitations and it is recommended that investors should:

1. Create a complete analytical framework that integrates multiple metric judgments
2. Understand the logic and purpose behind foreign exchange operations
3. Develop your own investment strategy and risk tolerance
4. Stay flexible and don't rely too much on a single piece of data

Remember that the investment market is not an absolute holy grail, and the number of foreign unopened positions is just one of the tools that help us better understand the market. Long-term gains in the market can only be sustained by continuous learning, discipline, and building an investment system that works for you.

Disclaimer: This article is for reference only and does not constitute any investment advice. Investing is risky. Investors should carefully assess their risk tolerance before making investment decisions.