OI-change writing vs exits
Many traders keep an option chain open all day and watch where fresh writing appears. This strategy turns that habit into rules. It adds up the change in call and put open interest at three strikes around the money; when put writing outweighs call writing and call writers are leaving, it buys NIFTY futures, and it sells on the mirror reading. The trade ends when the reading flips.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test the open-interest signal worked on expiry days, making ₹47,825 over 25 trades, and lost ₹41,398 on all other days. On expiry day, writing in the expiring series is heavy and decisive; earlier in the week the readings swing. Choppy sessions lost ₹36,964 over 33 trades, because the bias flipped back and forth after small moves, while trend days earned ₹27,763. Days after India VIX closed above 14.5 lost ₹36,758. The direction split is stark: sessions that closed above their open lost ₹1,14,409, while down sessions made ₹1,20,836, so the signal read falling days far better than rising ones.
About this strategy
- Use the nearest weekly expiry that is not expiring today. Find the at-the-money strike from that expiry's forward price, and take it plus the next two strikes above.
- For each of those strikes, measure how much call and put open interest has changed since the previous session's close. Add them up into a call sum and a put sum.
- Bias is bullish when the put sum is larger (put writing dominates) and bearish when the call sum is larger.
- Call writers are 'exiting' if the call sum is negative or call OI at the top strike has fallen; put writers are exiting if the put sum is negative or put OI at the ATM strike has fallen.
- Every minute from 09:30 to 14:45: buy one lot of the near-month future on a bullish bias with call writers exiting, or sell it on a bearish bias with put writers exiting.
- Close the trade at the first check where the bias turns against it, or at 15:15. One trade at a time, up to three a day.
Why traders use it
Option writers are usually the larger, better-capitalised side, so where they add fresh positions is read as a level they expect to hold. Rising put open interest near the money suggests writers are comfortable below the price; call writers unwinding suggests they no longer want to defend the upside. Reading both together is a common way Indian intraday traders build a directional view from the chain, and it is widely shown in live OI-change screens.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the strategy took 94 futures trades and won 57% of them, making only ₹6,427 before costs (profit factor 1.03). Losing trades averaged about ₹4,899 against ₹3,748 for winners. The year was dominated by two months: February made ₹33,513 and March ₹23,140, while April lost ₹15,215 and June and July lost almost ₹12,000 each. The maximum drawdown was ₹53,274 before costs. After ₹20 per order and bid-ask slippage the result became a ₹26,387 loss. Of the 94 trades, 59 were held to 15:15 and 35 closed on a bias flip.
What the settings do
Risks
- Open interest shows that positions changed, not who opened them or why, so the same reading can come from writers or from buyers.
- Profit depended on two months; outside them the rules lost steadily.
- Positions are futures with no stop loss other than the bias flip, so a sharp move before the next flip is fully absorbed.
- A small average gain per trade before costs left little room for brokerage and spread.
Who it suits
Intraday traders who already read OI change on the option chain and want to see how a strict, rule-based version of that reading performs. It needs futures margin and acceptance of long losing stretches between strong months.
Questions traders ask
How do you read OI change for intraday trading?
Compare how open interest has changed since yesterday's close at strikes near the money. Rising put OI with stable or falling call OI is often read as put writers expecting support, a bullish sign; rising call OI with falling put OI is read as bearish. This strategy adds the changes over three strikes to get one bullish or bearish reading.
Is the OI change call vs put writing strategy profitable?
In this backtest on NIFTY futures from 1 Oct 2025 to 30 Sep 2026 it made ₹6,427 before costs but lost ₹26,387 after ₹20 per order and bid-ask slippage, with statutory charges excluded. Almost all the gross profit came in February and March. Past results do not guarantee future ones.
Why does it trade NIFTY futures instead of options?
The chain reading gives a direction, and futures express that direction one-for-one without time decay or volatility changes. That keeps the test focused on whether the open-interest signal itself predicts the move.
What does 'call writers exiting' mean here?
Either the total call OI change across the three strikes is negative, or call open interest at the highest of those strikes has fallen since yesterday. Both suggest that sellers of calls above the price are closing positions, which the rules treat as confirmation for a long.