Hindustan Petroleum Sees Sharp Open Interest Surge Amid Mixed Price Action

Open Interest and Volume Dynamics

On 25 Feb 2026, Hindustan Petroleum's open interest (OI) in derivatives rose sharply from 23,498 contracts to 27,762, an increase of 4,264 contracts or 18.15%. This notable expansion in OI was accompanied by a futures volume of 22,806 contracts, underscoring robust trading activity. The futures value stood at approximately ₹60,088.7 lakhs, while the options segment exhibited an enormous notional value of ₹14,909 crores, cumulatively pushing the total derivatives value to ₹63,838.8 lakhs.

The underlying stock price closed at ₹436, having touched an intraday low of ₹432.45, down 3.27% on the day. The weighted average price indicated that a larger volume of trades occurred near the day's low, suggesting selling pressure despite the rising open interest.

Price Performance and Market Context

Hindustan Petroleum's 1-day return was -2.89%, underperforming the Oil sector's decline of -1.30% and contrasting with the Sensex's modest gain of 0.22%. The stock has reversed its short-term uptrend after two consecutive days of gains, with its price currently trading above the 200-day moving average but below the 5, 20, 50, and 100-day averages. This technical positioning indicates a mixed trend, with longer-term support intact but near-term resistance prevailing.

Investor participation remains elevated, as evidenced by a delivery volume of 18.03 lakh shares on 24 Feb, which surged 21.34% above the five-day average. The stock's liquidity is sufficient to accommodate trades worth ₹3.21 crores, based on 2% of the five-day average traded value, making it accessible for institutional and retail investors alike.

Interpreting the Open Interest Surge

The 18.15% jump in open interest suggests that new positions are being established rather than existing ones being squared off. This increase, coupled with high volume near the day's low, points to a complex market stance where participants may be positioning for a directional move while simultaneously hedging risks.

Given the stock's recent price weakness after a brief rally, the rising OI could indicate that traders are building short positions or protective puts, anticipating further downside or volatility. Alternatively, some investors might be accumulating long futures contracts at lower prices, expecting a rebound supported by the stock's strong fundamentals and dividend yield of 3.46%.

Mojo Score and Analyst Ratings

Hindustan Petroleum holds a Mojo Score of 74.0, reflecting a positive outlook with a Buy grade, upgraded from Hold on 9 Feb 2026. This upgrade signals improved confidence in the stock’s medium-term prospects, supported by its stable market capitalisation of ₹95,518 crores, categorised as a mid-cap. The market cap grade of 2 indicates moderate size and liquidity, suitable for active trading strategies.

Despite the recent price dip, the fundamental and technical assessments suggest that the stock remains attractive for investors seeking exposure to the oil sector, especially given its high dividend yield and rising investor participation.

Sector and Broader Market Comparison

Within the Oil sector, Hindustan Petroleum’s underperformance relative to the sector’s -1.30% decline and the Sensex’s positive return highlights stock-specific pressures. These may stem from profit booking or short-term concerns over crude price volatility and refining margins. However, the stock’s position above the 200-day moving average provides a key support level, which could limit further downside in the near term.

Investors should also consider the broader macroeconomic environment, including global energy demand forecasts and government policy on fuel pricing, which can materially impact Hindustan Petroleum’s earnings and market sentiment.

Potential Directional Bets and Market Positioning

The derivatives data suggests a nuanced market positioning. The simultaneous rise in open interest and volume near the low price indicates that both bulls and bears are active. Some traders may be using futures and options to hedge existing equity positions, while others could be speculating on near-term volatility.

Options notional value exceeding ₹14,909 crores points to significant activity in puts and calls, which could be interpreted as a sign of hedging or directional speculation. The elevated open interest in futures further confirms that participants are committing capital to directional views, possibly anticipating a breakout or breakdown depending on upcoming market catalysts.

Given the stock’s technical setup and fundamental strengths, investors should monitor open interest trends closely alongside price action to gauge whether the current surge represents a build-up to a sustained rally or a prelude to further correction.

Conclusion

Hindustan Petroleum Corporation Ltd. is currently at a critical juncture, with a pronounced increase in derivatives open interest signalling heightened market interest and evolving positioning. While the stock has experienced short-term weakness, its upgraded Mojo Grade to Buy and solid dividend yield underpin a favourable medium-term outlook.

Investors should weigh the mixed signals from price action and derivatives data carefully, considering both the risks of near-term volatility and the potential for recovery supported by strong fundamentals and sector dynamics. Close attention to open interest movements and volume patterns will be essential for making informed trading and investment decisions in this mid-cap oil sector stock.

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