Dixon Technologies Sees Sharp Open Interest Surge Amidst Prolonged Price Decline

Open Interest and Volume Dynamics

On 25 Feb 2026, Dixon Technologies recorded an open interest (OI) of 95,401 contracts, up from 81,343 the previous day, marking an increase of 14,058 contracts or 17.28%. This notable rise in OI was accompanied by a futures volume of 63,896 contracts, reflecting active trading interest in the stock’s derivatives. The futures value stood at ₹46,675.27 lakhs, while the options segment exhibited an extraordinary notional value of approximately ₹30,706.92 crores, underscoring the scale of derivative activity.

The total combined derivatives value reached ₹54,856.02 lakhs, indicating substantial liquidity and market participation in the stock’s derivatives instruments. Despite this, the underlying stock price closed at ₹10,365, down 1.52% on the day, underperforming its sector by 0.48% and the broader Sensex, which gained 0.18%.

Price Performance and Technical Context

Dixon Technologies has been on a persistent decline, losing 11.7% over the past seven consecutive trading sessions. The stock is currently trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical setup. This sustained weakness is compounded by a drop in delivery volume to 1.64 lakh shares on 24 Feb, down 13.43% from the five-day average, indicating reduced investor participation in the cash market.

Liquidity remains adequate, with the stock’s average traded value supporting a trade size of approximately ₹14.02 crores, ensuring that derivative trades can be executed without significant market impact.

Market Positioning and Potential Directional Bets

The sharp increase in open interest amid falling prices suggests that market participants are actively repositioning. Typically, rising OI with declining prices can indicate fresh short positions being established, as traders anticipate further downside. Alternatively, it may reflect hedging activity by institutional players seeking protection against volatility.

Given the stock’s underperformance relative to its sector and the broader market, the derivatives market appears to be pricing in continued weakness or increased volatility. The substantial notional value in options points to complex strategies, possibly involving protective puts or speculative calls, as traders seek to capitalise on expected price movements or hedge existing exposures.

Investors should note that Dixon Technologies’ Mojo Score has recently been downgraded from a Buy to a Hold, with a current score of 51.0 as of 3 Nov 2025. The Market Cap Grade remains modest at 2, reflecting its mid-cap status with a market capitalisation of ₹63,021.16 crores. This downgrade aligns with the technical weakness and subdued investor sentiment observed in recent sessions.

Sector and Benchmark Comparison

Within the Electronics & Appliances sector, Dixon Technologies’ 1-day return of -1.52% lags behind the sector’s -0.89% decline and contrasts with the Sensex’s modest 0.18% gain. This relative underperformance highlights sector-specific challenges or company-specific concerns that may be influencing investor behaviour.

Such divergence often attracts derivative traders looking to exploit volatility or hedge sector exposure. The sustained fall in the stock price, combined with rising open interest, suggests that market participants are positioning for continued downside or increased price swings in the near term.

Implications for Investors and Traders

For investors, the current scenario warrants caution. The downgrade to a Hold rating and the technical weakness suggest limited near-term upside. The falling delivery volumes indicate waning conviction among long-term holders, while the derivatives market activity points to increased speculative or hedging interest.

Traders active in the derivatives segment should closely monitor open interest trends alongside price action. A sustained rise in OI with continued price decline could confirm bearish sentiment, while any reversal accompanied by OI contraction might signal short-covering or a potential bottoming process.

Given the stock’s liquidity profile and sizeable derivatives turnover, Dixon Technologies remains a viable candidate for tactical trades, but risk management is paramount amid the prevailing volatility and uncertain directional cues.

Outlook and Conclusion

Dixon Technologies is navigating a challenging phase marked by persistent price declines and shifting market positioning. The surge in open interest in derivatives highlights active repositioning by market participants, likely reflecting bearish bets or protective strategies. While the stock’s fundamentals and sector dynamics remain important, the technical and derivatives signals suggest a cautious stance is advisable.

Investors should weigh the recent downgrade and technical indicators against broader market conditions and sector trends before making fresh commitments. Meanwhile, traders can exploit the heightened volatility and liquidity in the derivatives market, provided they maintain disciplined risk controls.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today