Open Interest and Volume Dynamics
On 25 Feb 2026, Hindustan Petroleum's open interest (OI) in derivatives rose sharply from 23,498 contracts to 26,735, an absolute increase of 3,237 contracts. This 13.78% jump in OI accompanied a daily volume of 15,821 contracts, indicating robust participation in futures and options trading. The futures segment alone accounted for a value of ₹45,358.58 lakhs, while options contributed a staggering ₹10,033.00 crores, culminating in a total derivatives value of approximately ₹47,969.99 lakhs.
This surge in OI suggests that market participants are actively building or adjusting positions, potentially anticipating significant price movements in the near term. The underlying stock price, however, closed at ₹434, having touched an intraday low of ₹433.6, down 3.01% on the day, signalling some selling pressure despite the increased derivatives activity.
Price Action and Technical Context
Hindustan Petroleum's price trend has shown signs of a reversal after two consecutive days of gains. The stock's weighted average traded price skewed closer to the day's low, indicating that sellers dominated the session. Notably, the stock trades above its 200-day moving average, a long-term bullish indicator, but remains below its 5-day, 20-day, 50-day, and 100-day moving averages, reflecting short- to medium-term weakness.
Such a technical setup often points to a consolidation phase or a potential correction within an overall uptrend. The rising delivery volume of 18.03 lakh shares on 24 Feb, up 21.34% from the five-day average, underscores growing investor participation, possibly from long-term holders accumulating at lower levels or short-term traders repositioning.
Sector and Market Comparison
In contrast to Hindustan Petroleum's 2.58% decline on the day, the Oil sector marginally gained 0.07%, while the Sensex advanced 0.64%. This relative underperformance highlights stock-specific factors influencing investor sentiment. The company’s market capitalisation stands at ₹92,666.67 crores, categorising it as a mid-cap stock with a Market Cap Grade of 2, reflecting moderate size and liquidity.
Despite the recent dip, the stock offers a healthy dividend yield of 3.46%, which may attract income-focused investors amid volatile price action.
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Market Positioning and Directional Bets
The increase in open interest alongside a decline in spot price suggests a nuanced market stance. Traders may be initiating fresh short positions or hedging existing long exposure, anticipating further downside or volatility. Alternatively, the rise in OI could reflect new long positions taken at lower strike prices in options, betting on a rebound after the recent correction.
Options data reveals a substantial notional value, indicating active call and put writing and buying. The large option value of over ₹10,033 crores points to significant hedging and speculative activity, which often precedes major directional moves.
Given the stock’s current positioning below key moving averages but above the 200-day average, investors are likely weighing the prospects of a medium-term recovery against near-term risks. The Mojo Score of 74.0 and an upgraded Mojo Grade from Hold to Buy as of 9 Feb 2026 reflect improving fundamentals and positive analyst sentiment, supporting a cautiously optimistic outlook.
Liquidity and Trading Considerations
Hindustan Petroleum remains sufficiently liquid for sizeable trades, with daily traded value supporting transactions up to ₹3.21 crores without significant market impact. This liquidity is crucial for institutional investors and active traders seeking to capitalise on the evolving derivatives landscape.
Investors should monitor the evolving open interest and volume patterns closely, as sustained increases in OI coupled with price stabilisation above key moving averages could signal a resumption of the uptrend. Conversely, a sharp drop in OI or a breach below the 200-day moving average may confirm bearish momentum.
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Outlook and Investor Takeaways
Hindustan Petroleum’s recent surge in derivatives open interest amid a modest price decline highlights a market in flux. The upgraded Mojo Grade to Buy and a solid Mojo Score of 74.0 underpin a fundamentally sound company with improving prospects in the oil sector. However, the short-term technical indicators and price action suggest caution as investors digest recent volatility.
For investors, the key will be to watch how open interest evolves in conjunction with price movements and volume. A sustained increase in OI with price recovery above short-term moving averages could confirm renewed bullish momentum. Conversely, a drop in OI or further price weakness may indicate profit-taking or a shift towards bearish positioning.
Given the stock’s attractive dividend yield of 3.46% and mid-cap status with reasonable liquidity, it remains a compelling candidate for investors seeking exposure to India’s oil sector with a balanced risk-reward profile.
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