HDFC Asset Management Sees Sharp Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

The latest data reveals that HDFCAMC's open interest rose from 32,181 contracts to 37,196, an increase of 5,015 contracts. This 15.58% jump in OI was accompanied by a robust volume of 35,218 contracts traded, indicating strong participation in the derivatives market. The futures segment alone accounted for a notional value of approximately ₹1,07,039 lakhs, while options contributed a staggering ₹18,852.68 crores, culminating in a total derivatives value exceeding ₹1,08,200 lakhs.

This surge in open interest, coupled with elevated volumes, suggests that traders are actively repositioning themselves, possibly anticipating a directional move in the stock. The underlying spot price stood at ₹2,745, with the stock experiencing a downward trend over the past two days, losing 3.89% cumulatively.

Price Action and Technical Context

On 18 Feb, HDFCAMC touched an intraday low of ₹2,732, down 2.87% from the previous close, with the weighted average price of traded contracts clustering near this low. This indicates that the bulk of trading activity occurred closer to the day's bottom, reflecting bearish sentiment among short-term traders.

Technically, the stock remains above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it is trading below its 5-day moving average, highlighting near-term weakness. This divergence between short- and long-term moving averages often points to a consolidation phase or a potential correction within an overall bullish trend.

Investor Participation and Liquidity

Investor engagement has notably increased, with delivery volumes rising to 6.22 lakh shares on 18 Feb, a 56.8% jump compared to the five-day average. This heightened delivery volume suggests that more investors are holding shares rather than trading intraday, which could imply confidence in the stock’s medium-term prospects despite recent price weakness.

Liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹4.18 crores comfortably, ensuring that institutional and retail investors can transact without significant market impact.

Market Positioning and Directional Bets

The sharp increase in open interest alongside rising volumes suggests that market participants are actively adjusting their positions. Given the recent price decline and the clustering of traded volumes near the day’s low, it appears that a significant number of traders are taking bearish stances, possibly through put options or short futures positions.

However, the sustained delivery volumes and the stock’s position above key longer-term moving averages indicate that institutional investors may be accumulating shares, anticipating a rebound or sustained growth in the capital markets sector. This dichotomy between short-term bearish bets and longer-term bullish positioning creates a nuanced market environment.

Mojo Score and Analyst Ratings

HDFC Asset Management Company Ltd currently holds a Mojo Score of 61.0, categorised as a 'Hold' rating, a downgrade from its previous 'Buy' status as of 8 Jan 2026. This reflects a cautious stance by analysts, balancing the company’s strong market capitalisation of ₹1,17,554.81 crores against recent price underperformance and volatility in derivatives activity.

The stock underperformed its sector by 1.36% and the Sensex by 1.31% on the day, signalling relative weakness. Investors should weigh these factors carefully, considering both the potential for medium-term recovery and the risks posed by near-term technical pressures.

Sector and Market Context

Operating within the capital markets sector, HDFCAMC’s performance is closely tied to broader market trends and investor sentiment towards financial services. The sector’s 1-day return of -0.85% and the Sensex’s -1.12% decline on 18 Feb 2026 underscore a cautious market mood, likely influenced by macroeconomic factors and global cues.

In this environment, the surge in derivatives open interest may also reflect hedging activity by institutional players seeking to manage risk amid uncertainty.

Investor Takeaway

The recent spike in open interest for HDFC Asset Management Company Ltd highlights a period of active repositioning in the derivatives market, with traders seemingly placing directional bets amid a backdrop of price weakness. While short-term technical indicators point to caution, the stock’s strong fundamentals and elevated delivery volumes suggest underlying investor confidence.

Investors should monitor upcoming price action closely, particularly the interplay between short-term moving averages and open interest trends, to gauge whether the current consolidation phase will resolve into a renewed uptrend or further correction.

Given the Mojo Grade downgrade to 'Hold', a prudent approach would be to balance exposure with alternative opportunities in the capital markets sector and beyond, utilising tools that compare relative strengths and valuations.

Conclusion

HDFC Asset Management Company Ltd’s derivatives market activity on 18 Feb 2026 underscores a complex market narrative. The 15.58% rise in open interest and strong volumes reflect heightened trader engagement and potential directional bets, while the stock’s price action and technical indicators suggest a cautious near-term outlook. Investors should remain vigilant, balancing the company’s robust market capitalisation and sector positioning against evolving market dynamics and analyst guidance.

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