Foreign portfolio investors (FPIs) created overnight positions or open interest (OI) in BSE's Sensex options during fiscal year 2025-26, marking the first such move since the contracts were relaunched in May 2023.
FPI open interest in value terms stood at ₹20,056 crore out of ₹2.2 trillion total open interest as of March end 2026 from zero in FY25. By the end of April, the value of FPI OI stood at ₹1.2 trillion of the total ₹8.99 trillion.
OI measures the amount of money flowing into a market by the initiation of a long (buy) or short (sell) trade that is carried for more than a day. Unlike volumes, which can be generated by intraday trades, OI signals the depth of a market as investors keep trades open for long.
The greater the OI, the more money flows into a market. FPIs, for the first time since Sensex options were relaunched in May 2023, held 10.31% of total open interest beginning May of FY26. Thereafter, the OI slumped to zero for the next four months before recovering in October and ending in March 2026 at 9.09%, or ₹20,056 crore, per Securities and Exchange Board of India (Sebi) data.
Their OI jumped again to 13.5% in April. Other major contributors to OI include retail/high-net-worth investors and proprietary traders, whose share of total OI stood at 60.5% and 30.4% as of FY26 end, and 48.7% and 37.8% as of April end, per the data.
The reason for renewed FPI participation in open interest is increased activity in longer-term Sensex options contracts (monthly) than the popular weekly contracts.
"Sensex monthly options premium turnover has risen 13 times between January 2025 and May 2026, while the number of contracts traded have gone (up) by 8 times. Comparatively, weekly premium turnover has grown 2.6 times and weekly contracts traded have gone up by 1.7 times during the same period," said a BSE spokesperson.
This has resulted in the count of FPIs registered with BSE rising fivefold to 520 in FY26 from 100 in the previous fiscal year, he added.
"There is growing interest in Sensex derivatives among FPIs who also participate very meaningfully in the Nifty derivatives," said Rajesh Palviya, senior vice president (technical & derivatives) at Axis Securities.
FPI share in Nifty derivatives' open interest stood at 31.7% as of the end of FY26 and 26.1% as of April end this year, per Sebi data. The value, based on the data, is not easy to ascertain, as, unlike BSE, where Sensex options have the lion's share, NSE witnesses liquidity across index and stock futures and options.
Sensex options market share increased to 27.8% as of April end, from 20% a year ago. NSE index and stock options account for the rest.