What SEBI’s studies found
India’s market regulator has published two widely cited studies on individual traders in equity futures and options.
SEBI’s September 2024 study reported that 93% of more than one crore individual F&O traders made losses over FY22 to FY24, with average losses of around ₹2 lakh per trader. The earlier study found 89% loss-makers in FY22 alone.
There is no single cause. Costs, leverage and over-trading all play a part. But one gap shows up again and again in how retail traders read the market: they see that price moved, not who moved it.
The blind spot in price and volume
A candle that breaks resistance on high volume looks the same whether new buyers are arriving or old shorts are rushing to exit. The trades are the same size. The future is completely different.
Open interest — the number of contracts still open — is the missing field. When it rises, new positions are being created. When it falls, existing ones are being closed.
The four OI quadrants
| Price | OI | Reading | What it usually means |
|---|---|---|---|
| ↑ Up | ↑ Up | Long buildup | New money buying — trend has fuel |
| ↓ Down | ↑ Up | Short buildup | New sellers committing — rallies get sold |
| ↑ Up | ↓ Down | Short covering | Shorts exiting — the rally is hollow |
| ↓ Down | ↓ Down | Long unwinding | Longs leaving — a fall without conviction |
The most expensive of the four for retail traders is short covering. It produces sharp, convincing rallies that look exactly like breakouts — and stop the moment the last short is out. Traders who buy that breakout are buying from the people leaving.
Levels where money is committed
Most support and resistance is drawn at prices where the chart paused. Open interest lets you draw it where positions were built instead. The OI-POC — the price with the most new positions — is where committed money sits, which is exactly why it gets defended.
The Mirra Market Profile draws an OI value area and OI-POC beside the normal volume profile, and labels each session’s buildup. Mirra Order Flow prints the delta × ΔOI quadrant under every footprint bar. Both read live open interest from the Accelpix feed inside NinjaTrader 8.
Using it without overtrading
- Filter, do not trigger. Use OI to skip bad trades, not to find more of them.
- Respect the session. OI is most meaningful over a full session; single bars can be noisy.
- Combine with location. A long buildup at the value area low is stronger than one in the middle of nowhere.
- Size down in covering rallies. If you must trade them, trade them small and fast.
New to these terms? The plain-English glossary explains every one in a line. For the full method, see the Open Interest section of the Market Profile guide.
Frequently asked
Is open interest available for stocks in the cash market?
No. OI exists only for futures and options. Equity traders read it from the stock or index futures written on their share.
Does rising OI always mean a trend will continue?
No. It means positions are being added. Combine it with price location and the session’s structure.
Why do most charting platforms not show OI intraday?
Most retail data feeds carry price and volume only. Intraday OI needs a feed that delivers it.
- SEBI, “Analysis of Profit and Loss of Individual Traders dealing in Equity F&O Segment”, January 2023 and September 2024. Please verify figures against the original reports on sebi.gov.in before quoting them.
Educational content only — not investment advice. Trading in securities, derivatives, crypto and forex involves substantial risk of loss.