◇ GLOSSARY
Open interest cap
A venue-imposed limit on total outstanding notional for a contract or account tier. When OI approaches the cap, new positions may be blocked or leverage reduced until OI falls — a liquidity and crowding guardrail, not a personal position limit by default.
Open interest measures how much size is still open. A cap says the venue will not let that stack grow without bound. Reasons vary: insurance fund capacity, oracle risk on thin coins, or regulatory buckets on regulated perps.
Caps bite at the worst times. Crowded books near the ceiling cannot absorb new leverage; exits still work, but adding hedge or rescue size may fail. Read venue docs for per-asset and per-account tiers before you plan a large hold.
An OI cap is not the same as your max position size. You can be far below your personal limit and still hit a market-wide ceiling during a narrative trade everyone piles into.