Cholamandalam Investment Sees Sharp Open Interest Surge Amid Mixed Technical Signals

Open Interest and Volume Dynamics

The latest data reveals that CHOLAFIN’s open interest jumped from 39,426 contracts to 45,892 contracts, an absolute increase of 6,466 contracts or 16.4%. This rise in OI is accompanied by a futures volume of 27,876 contracts, indicating robust trading activity in the derivatives market. The futures value stood at ₹1,57,472.04 lakhs, while the options segment recorded an enormous notional value of approximately ₹13,357.12 crores, culminating in a total derivatives market value of ₹1,58,418.87 lakhs for the stock.

Such a pronounced increase in open interest, coupled with strong volume, typically reflects fresh capital entering the market or existing participants expanding their positions. This can be interpreted as a sign of increased conviction among traders regarding the stock’s near-term price trajectory.

Price Performance and Technical Context

On the price front, CHOLAFIN outperformed its NBFC sector by 1.62% and the Sensex by 1.63% on the day, closing near an intraday high of ₹1,667.30, a 2.43% gain. Notably, the stock reversed its trend after two consecutive days of decline, signalling a potential short-term recovery or consolidation phase.

From a technical standpoint, the stock price remains above its 100-day and 200-day moving averages, indicating a longer-term bullish bias. However, it trades below the 5-day, 20-day, and 50-day moving averages, suggesting some near-term resistance and a possible pause in momentum. This mixed technical picture aligns with the observed open interest surge, where market participants may be positioning cautiously for a directional move.

Investor Participation and Liquidity Considerations

Interestingly, despite the price gains and OI increase, delivery volumes have fallen sharply. On 21 Jan 2026, the delivery volume was 5.7 lakh shares, down 58.04% compared to the five-day average. This decline in investor participation at the delivery level may indicate that the recent price action is driven more by speculative or short-term traders rather than long-term holders.

Liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹6.25 crores based on 2% of the five-day average traded value. This ensures that the derivatives market activity is supported by sufficient underlying liquidity, reducing the risk of exaggerated price moves due to thin trading.

Market Positioning and Potential Directional Bets

The surge in open interest alongside rising prices suggests that traders are increasingly bullish on CHOLAFIN in the near term. The increase in OI is often interpreted as fresh long positions being added rather than short covering, especially when accompanied by price appreciation. However, the subdued delivery volumes and the stock’s position below short- and medium-term moving averages hint at some caution among longer-term investors.

Options market data, with a notional value exceeding ₹13,357 crores, indicates significant hedging and speculative activity. The large options value relative to futures suggests that market participants may be employing complex strategies such as spreads or straddles to capitalise on expected volatility or directional moves.

Given the stock’s large market capitalisation of ₹1,40,284.09 crores and its classification as a Hold with a Mojo Score of 65.0 (downgraded from Buy on 13 Jan 2026), the market appears to be in a phase of reassessment. The downgrade reflects tempered expectations amid sectoral headwinds and valuation considerations, despite the recent positive price action and derivatives activity.

Sector and Benchmark Comparison

CHOLAFIN’s 2.11% one-day return notably outpaced the NBFC sector’s 0.82% gain and the Sensex’s 0.48% rise, underscoring its relative strength. This outperformance, combined with the derivatives market activity, may attract attention from traders seeking alpha within the NBFC space.

However, the stock’s liquidity and delivery volume trends suggest that the rally may be driven more by short-term momentum than broad-based investor conviction. This dynamic warrants close monitoring, especially as the stock navigates resistance levels near its short-term moving averages.

Outlook and Investor Takeaways

Investors should interpret the recent open interest surge in CHOLAFIN’s derivatives with a balanced perspective. The increase signals renewed interest and potential bullish positioning, but the mixed technical indicators and falling delivery volumes counsel caution. The stock’s Hold rating and Mojo Grade of 65.0 reflect this nuanced stance, suggesting that while opportunities exist, risks remain amid sectoral uncertainties and valuation pressures.

For traders, the derivatives market activity offers avenues to capitalise on expected volatility and directional moves, but a clear breakout above short-term moving averages would be a more convincing signal of sustained upward momentum. Conversely, failure to hold current levels could trigger profit-taking and a reversion to the recent downtrend.

Overall, Cholamandalam Investment & Finance remains a key stock to watch within the NBFC sector, with its large-cap status and active derivatives market making it a focal point for both institutional and retail participants.

Summary of Key Metrics:

• Open Interest: 45,892 contracts (up 16.4%)


• Futures Volume: 27,876 contracts


• Futures Value: ₹1,57,472.04 lakhs


• Options Value: ₹13,357.12 crores


• Stock Price: ₹1,660 (intraday high ₹1,667.30)


• Market Cap: ₹1,40,284.09 crores (Large Cap)


• Mojo Score: 65.0 (Hold, downgraded from Buy on 13 Jan 2026)


• Delivery Volume: 5.7 lakh shares (down 58.04%)


• Sector 1D Return: 0.82%, Sensex 1D Return: 0.48%

Conclusion

The sharp rise in open interest for Cholamandalam Investment & Finance Company Ltd underscores a growing interest in the stock’s derivatives, reflecting a complex interplay of bullish bets and cautious positioning. While the stock’s recent price gains and relative outperformance are encouraging, the mixed technical signals and declining delivery volumes suggest that investors should remain vigilant. Monitoring the evolution of open interest alongside price and volume trends will be crucial in assessing the sustainability of this momentum and the stock’s directional bias in the coming sessions.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →