Dixon Technologies Sees Heavy Call Option Activity Amid Bearish Price Trend

Call Option Activity Highlights

On the expiry date of 24 February 2026, Dixon Technologies recorded a remarkable 8,908 call option contracts traded at the ₹10,600 strike price. This activity generated a turnover of ₹13.24 crores, signalling robust interest from market participants betting on an upward move beyond this level. The open interest at this strike stands at 769 contracts, indicating a substantial build-up of positions that could influence price action in the near term.

The underlying stock closed at ₹10,407 on the same day, just shy of the key strike price, suggesting that traders are positioning for a potential rebound or a volatility-driven move above this threshold. The concentration of call options at this strike price is notable given the stock’s recent price trajectory.

Price Performance and Technical Context

Dixon Technologies has been on a downward trajectory, losing 11.42% over the past six trading sessions. This decline contrasts with the Electronics & Appliances sector, which has fared slightly better, and the broader Sensex index, which has also seen more modest losses. The stock underperformed its sector by 0.49% on the day, closing down 1.84% compared to the sector’s 1.56% decline and Sensex’s 1.14% fall.

Technically, the stock is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish trend across multiple timeframes. This persistent weakness has not deterred options traders from accumulating bullish call positions, which may reflect expectations of a near-term recovery or a volatility play ahead of expiry.

Investor participation has been rising, with delivery volumes on 23 February reaching 2.12 lakh shares, a 19.88% increase over the five-day average. This heightened activity suggests that despite the price decline, there remains considerable interest in the stock from both institutional and retail investors.

Fundamental and Market Positioning

Dixon Technologies operates in the Electronics & Appliances industry and is classified as a mid-cap stock with a market capitalisation of approximately ₹63,909 crores. The company’s current Mojo Score stands at 51.0, reflecting a Hold rating, which was downgraded from a Buy on 3 November 2025. This shift in rating underscores a more cautious outlook from analysts, likely influenced by recent price weakness and sector headwinds.

The Market Cap Grade of 2 indicates moderate size and liquidity, which is corroborated by the stock’s ability to handle trade sizes up to ₹13.15 crores based on 2% of the five-day average traded value. This liquidity profile supports active options trading and facilitates sizeable institutional participation.

Options Market Sentiment and Expiry Dynamics

The heavy call option activity at the ₹10,600 strike price, just above the current spot price, suggests that traders are positioning for a potential upside breakout. Given the expiry date coincides with the day of this activity, it is likely that market participants are either rolling over positions or speculating on a last-minute price surge to capitalise on intrinsic value gains.

Open interest data reveals that while 769 contracts remain outstanding at this strike, the volume traded on expiry day was significantly higher, indicating active unwinding and re-establishment of positions. This dynamic is typical in expiry week, where volatility tends to spike and directional bets intensify.

Despite the bearish price trend, the options market’s bullish tilt may reflect expectations of a technical rebound or a short squeeze, especially as the stock approaches key support levels. Alternatively, some traders may be employing call options as a hedge against short positions or as a leveraged play on anticipated positive news or sector recovery.

Implications for Investors

For investors, the current scenario presents a nuanced picture. The stock’s sustained decline and technical weakness caution against aggressive long positions in the cash market. However, the concentrated call option activity at a strike price slightly above the current level indicates that some market participants anticipate a recovery or at least a volatility-driven rally in the short term.

Investors should monitor the stock’s price action closely around the ₹10,600 level in the coming sessions, as a decisive break above this strike could validate the bullish options positioning and attract further buying interest. Conversely, failure to breach this level may result in a continuation of the downtrend, with call option premiums potentially decaying rapidly post-expiry.

Given the Hold rating and the downgrade from Buy, a cautious approach is advisable. Investors may consider hedging strategies or selective exposure through options rather than outright equity purchases until clearer directional signals emerge.

Sector and Market Context

The Electronics & Appliances sector has faced headwinds recently, with supply chain disruptions and fluctuating consumer demand impacting earnings visibility. Dixon Technologies, as a key player in this space, is not immune to these challenges. The sector’s modest outperformance relative to Dixon’s stock suggests company-specific factors may be weighing on sentiment, including valuation concerns and profit-taking after recent rallies.

Broader market conditions, reflected in the Sensex’s 1.14% decline on the day, also contribute to the cautious mood. In such an environment, options markets often become a focal point for expressing directional views with limited capital outlay, explaining the surge in call option volumes despite spot price weakness.

Conclusion

Dixon Technologies’ prominent position as the most active stock in call options trading on 24 February 2026 highlights a complex interplay between bearish price trends and bullish derivatives positioning. While the stock continues to face downward pressure, the concentrated call option interest at the ₹10,600 strike price signals that some investors are betting on a near-term recovery or volatility spike.

Investors should weigh the technical and fundamental signals carefully, recognising the risks inherent in the current market environment. The Hold rating and recent downgrade reflect a tempered outlook, but the options market activity suggests that opportunities for tactical plays remain. Close monitoring of price levels and expiry dynamics will be crucial in navigating the stock’s near-term trajectory.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →