BSE Sensex options: FPIs build ₹1.2 trillion OI in FY26

What changed in Sensex options trading

Foreign portfolio investors (FPIs) created overnight positions, or open interest (OI), in BSE’s Sensex options during fiscal year 2025-26. This marked the first such move since the contracts were relaunched in May 2023. The development matters because overnight positions signal deeper participation than same-day trading, and they can change liquidity patterns across weekly and monthly contracts. The reported shift also comes at a time when FPI derivative positioning in other index products has been closely watched for signs of risk-off sentiment. BSE management has been highlighting the growing traction in Sensex options, especially weekly expiries. But the new data point is that FPIs have started carrying positions beyond one trading session. That behaviour is typically associated with strategy-led trading rather than only intraday flows.

Open interest numbers: from zero to meaningful share

As of March-end 2026, FPI open interest in value terms stood at ₹20,056 crore. This was out of a total open interest of ₹2.2 trillion, or ₹2,20,000 crore, at that point. The same metric was reported as zero in FY25, underscoring how recent the participation is. By the end of April, the value of FPI OI stood at ₹1.2 trillion, or ₹1,20,000 crore, out of a total ₹8.99 trillion, or ₹8,99,000 crore. The April data indicates a sharp increase in both the absolute level of open interest and the FPI share. The jump between March-end and April-end is notable in value terms, though the article does not specify the exact day-by-day build-up. What is clear is that the market moved from “no overnight positions” in FY25 to sizable carried positions in FY26.

What open interest indicates in derivatives

Open interest measures the amount of money flowing into a market through the initiation of a long (buy) or short (sell) trade that is carried for more than a day. In other words, it reflects outstanding positions, not just traded volume. When OI rises, it can mean new positions are being created rather than traders simply closing old ones. In index options, higher OI can also support tighter bid-ask spreads and better execution, especially around key strikes. But the data provided only speaks to the size of outstanding positions, not whether they are net bullish or bearish. The context around FPI futures positioning, however, shows that overseas investors have also used derivatives to express downside views in other instruments.

BSE management highlights FPI onboarding surge

BSE’s MD and CEO S. Ramamurthy said the exchange saw a fivefold jump in onboarding foreign investors in a single year, driven by the growing popularity of Sensex options. He said active FPI count rose to 520 from 100 over the past fiscal year. The comments were made during an investor call after BSE declared its thirteenth straight quarter of record earnings. Ramamurthy also indicated that some funds are looking at longer-term option trading strategies. According to him, that trend could deepen the market and increase the Sensex options’ premium-to-notional turnover ratio. He added that weekly contracts have “enough participation” and that BSE sees stronger FPI participation in near, mid, and far monthly contracts. The exchange’s message is that the next phase of growth is not only weekly volumes, but also longer-dated liquidity.

Market moves and the backdrop of risk positioning

In one of the sessions referenced, the Sensex closed at 74,267, down 508 points or 0.68%, taking its four-day losses to 2,220 points. Separately, reports also cited a positive opening in another session, where the Nifty 50 started at 25,922.65, up 55.35 points or 0.21%, and the Sensex opened at 84,210, up 144.25 points or 0.17%. In another session, the Sensex surged 485 points, or 0.58%, to close at 84,065.75, while the Nifty 50 advanced 0.68% to 25,867. These moves, taken together, show a market that has been swinging between risk-on rebounds and risk-off sell-offs across different dates. The article also referenced an instance where sentiment improved after India sealed a trade deal with the US, prompting traders to cover short positions in index futures. The Sensex was reported to have ended 2.5% higher at 83,739.13 points in that rebound, up 2,072.67 points.

FPI futures positioning remains heavily skewed to shorts

Alongside Sensex options participation, the data highlighted that FPIs increased their cumulative shorts on Nifty and Bank Nifty futures to 277,164 contracts on Monday. This was just 1,853 contracts below the record bearish positioning of 279,467 contracts seen on 27 March, according to analytics firm IndiaCharts citing NSE data. In another referenced data point, FPI net short positions were stated at 201,567 contracts, described as a one-year peak. These figures suggest that while FPIs are building carried positions in Sensex options, they have also maintained significant bearish exposure in index futures during parts of the period covered. The article does not quantify how much of the Sensex options OI is directional versus hedged. But it does establish that foreign investors are active across multiple derivative instruments. For market participants, the key is that rising OI can coincide with either hedging demand or speculative positioning.

Key figures snapshot

Additional flow data cited

The article also included the following row of figures without further column labels:

Why this matters for liquidity and contract mix

BSE’s stated aim is to deepen liquidity, especially in longer-dated monthly contracts. If more participants carry positions overnight, it can support healthier order books beyond the weekly expiry. That, in turn, can improve hedging efficiency for institutions and reduce execution costs for larger trades. The management commentary suggests that weekly contracts already have sufficient participation, and the focus is now on building depth across near, mid, and far monthly expiries. The data supports the idea that FPIs are no longer absent from overnight OI in Sensex options. However, the broader derivatives context shows that FPI positioning can remain cautious, with heavy short exposure in Nifty and Bank Nifty futures at times. For investors, the relevant takeaway is that a growing Sensex options market may not automatically imply bullish sentiment, but it can indicate a maturing derivatives ecosystem with more strategy-led participation.

Conclusion

FPIs carrying overnight open interest in BSE Sensex options in FY26 marks a clear change from FY25, when the article says foreign OI was zero. With FPI OI rising from ₹20,056 crore at March-end to ₹1.2 trillion by end-April, the scale of participation has increased quickly in value terms. BSE management is also reporting a jump in active FPI registrations, with a stated focus on building liquidity in longer-dated contracts. At the same time, the broader market backdrop includes significant FPI short positioning in index futures and sharp swings in headline indices across different sessions. The next data points to watch, based on what BSE has highlighted, will be whether participation broadens further into near, mid, and far monthly expiries and whether the OI share stabilises at higher levels.