Traffic loops are the original automobile detection device, and more technically known as in-ground induction loops. They operate in the same way as a metal detector, only upside down. A metal detector is basically a solenoid, a simple device with a mild current running through a loop of wire. As long as the loop is in motion, any nearby metal will interfere with the electro-magnetic field the current is creating, and will register a slight drop in the amperage. Ferrous metals (iron and steel) are the most magnetic of the metals, and are therefore most likely to affect the current and register a signal on the ammeter.
Loop wires are imbedded in to the asphalt, but at a very shallow depth, usually no more than a few inches, and detect the motion of the passing of large metal objects, automobiles. Just like the metal detector, the wire loop needs to be as close to the metal object as possible, so the loops are placed in a thin shallow cut in the asphalt, either in a circular or rectangular shape, and a sealant placed on top. Typically, they need to be placed no more than about 6 inches under the surface of the asphalt, and preferably less, just enough to protect them from passing traffic, while still being able to detect that traffic.