Hindustan Petroleum Sees Sharp Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 25 Feb 2026, Hindustan Petroleum’s open interest (OI) in derivatives rose sharply to 27,035 contracts from the previous 23,498, marking an increase of 3,537 contracts or 15.05%. This surge in OI was accompanied by a substantial volume of 18,792 contracts traded, indicating robust participation from both institutional and retail traders. The futures segment alone accounted for a notional value of approximately ₹52,389 lakhs, while options contributed a staggering ₹12,038 crore, culminating in a total derivatives value exceeding ₹55,455 lakhs.

The underlying stock price closed at ₹438, down 2.96% on the day, underperforming the Oil sector’s modest decline of 0.30% and the broader Sensex which gained 0.38%. Intraday, the stock touched a low of ₹433, with the weighted average price skewed towards the lower end of the day’s range, suggesting selling pressure intensified as the session progressed.

Market Positioning and Sentiment

The rise in open interest amid a falling stock price often points to fresh short positions being established or existing shorts being added to, signalling bearish sentiment among derivatives traders. However, the elevated volume and OI also imply that some participants may be hedging long exposures or positioning for a potential rebound, given the stock’s recent two-day gain prior to the decline.

Notably, Hindustan Petroleum’s delivery volume on 24 Feb surged to 18.03 lakh shares, a 21.34% increase over the five-day average, reflecting rising investor participation and conviction at current price levels. The stock’s liquidity remains healthy, with a trade size capacity of ₹3.21 crore based on 2% of the five-day average traded value, facilitating smooth execution of sizeable trades without significant price impact.

Technical and Fundamental Context

Technically, the stock is trading above its 200-day moving average, a long-term bullish indicator, but remains below its 5-day, 20-day, 50-day, and 100-day averages, signalling short- to medium-term weakness. This mixed technical picture may be contributing to the cautious stance among traders, who appear to be balancing between potential trend reversals and profit-taking.

Fundamentally, Hindustan Petroleum boasts a market capitalisation of ₹95,518 crore, categorising it as a mid-cap stock within the Oil sector. The company offers a relatively attractive dividend yield of 3.46%, which may appeal to income-focused investors amid market volatility. Its recent upgrade in MarketsMOJO’s Mojo Grade from Hold to Buy on 9 Feb 2026, with a Mojo Score of 74.0, reflects improving fundamentals and positive outlook, although the market’s immediate reaction has been mixed.

Implications of the Open Interest Surge

The 15.05% increase in open interest is significant in the context of Hindustan Petroleum’s recent price action. Typically, rising OI alongside falling prices suggests that new short positions are being built, reflecting bearish bets on the stock’s near-term prospects. This is corroborated by the stock’s underperformance relative to its sector and the broader market.

However, the elevated delivery volumes and the stock’s position above the 200-day moving average indicate that long-term investors may be accumulating shares, anticipating a recovery or sustained dividend income. This divergence between short-term derivatives traders and longer-term holders creates a nuanced market environment where directional bets are mixed.

Options market data, with an options notional value exceeding ₹12,038 crore, further highlights active hedging and speculative activity. Traders may be employing strategies such as protective puts or call spreads to manage risk amid uncertain price trends. The large options value also suggests that volatility expectations remain elevated, which could lead to sharp price swings in the coming sessions.

Sector and Market Context

Within the Oil sector, Hindustan Petroleum’s performance contrasts with the sector’s relatively muted decline of 0.30%. This underperformance may be attributed to company-specific factors such as earnings outlook, refining margins, or regulatory developments impacting the stock. The broader market’s positive return of 0.38% on the Sensex underscores the stock’s relative weakness on the day.

Investors should also consider global crude oil price trends and geopolitical factors that influence the Oil sector’s fundamentals. Any shifts in crude prices or government policies on fuel pricing could materially affect Hindustan Petroleum’s earnings and, consequently, its derivatives market positioning.

Investor Takeaways and Outlook

For investors, the current surge in derivatives open interest combined with the stock’s recent price weakness suggests caution. Short-term traders may look to capitalise on the increased volatility and directional bets, while long-term investors should monitor fundamental developments closely.

The upgrade to a Buy rating by MarketsMOJO, supported by a solid Mojo Score of 74.0, indicates improving company prospects. However, the stock’s underperformance relative to its sector and the broader market signals that risks remain, particularly in the near term.

Given the high dividend yield of 3.46%, income-oriented investors might find value in accumulating shares on dips, provided they are comfortable with the sector’s cyclicality and price volatility. Meanwhile, derivatives traders should watch open interest and volume trends closely for signs of trend confirmation or reversal.

Overall, Hindustan Petroleum’s derivatives market activity reflects a dynamic interplay of bullish and bearish forces, underscoring the importance of a balanced approach to trading and investment decisions in this mid-cap Oil stock.

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