Hindustan Unilever Ltd Sees Sharp Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

The latest data reveals that Hindustan Unilever’s open interest rose from 82,178 contracts to 94,502 contracts, an increase of 12,324 contracts or 15.0%. This substantial rise in OI was accompanied by a total volume of 1,37,238 contracts traded on the derivatives platform, indicating robust participation. The futures segment alone accounted for a value of approximately ₹1,05,067 lakhs, while options contributed a staggering ₹91,935 crores in notional value, culminating in a combined derivatives turnover of ₹1,17,030 lakhs.

This surge in OI alongside high volume typically suggests fresh positions being initiated rather than existing ones being squared off, pointing to increased conviction among market participants. However, the directional bias remains ambiguous given the stock’s recent price action.

Price Performance and Market Context

On the cash market front, Hindustan Unilever’s share price declined by 2.83% on the day, closing near an intraday low of ₹2,391.2. This drop contrasts with the stock’s longer-term technical strength, as it continues to trade above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. The stock’s 1-day return of -1.73% lagged behind the FMCG sector’s -0.90% and the Sensex’s modest -0.36% declines, underscoring relative underperformance.

Investor participation also showed signs of waning, with delivery volumes falling by 2.05% to 7.44 lakh shares compared to the 5-day average. Liquidity remains adequate, supporting trade sizes up to ₹6.29 crores based on 2% of the 5-day average traded value, ensuring that institutional and retail investors can transact without significant market impact.

Market Positioning and Directional Bets

The sharp increase in open interest, coupled with a decline in the underlying stock price, suggests a divergence in market expectations. Traders may be building protective put positions or speculating on further downside, while others could be initiating call options anticipating a rebound. The large notional value in options indicates significant hedging activity, possibly by institutional investors managing portfolio risk amid volatile market conditions.

Hindustan Unilever’s Mojo Score currently stands at 48.0, with a Mojo Grade downgraded from Hold to Sell as of 3 Dec 2025. This downgrade reflects concerns over valuation pressures and potential earnings headwinds in the FMCG sector. The company’s market cap remains substantial at ₹5,80,537 crores, categorising it as a large-cap stock with a Market Cap Grade of 1, signalling high market capitalisation but limited upside from a momentum perspective.

Technical and Fundamental Considerations

Despite the recent price weakness, the stock’s position above all major moving averages indicates underlying technical support. However, the falling investor participation and negative day-on-day returns highlight caution among shareholders. The sector’s performance, down 0.90% on the day, also weighs on sentiment, though Hindustan Unilever’s underperformance relative to the sector suggests company-specific factors at play.

Fundamentally, the FMCG sector faces challenges from inflationary pressures and changing consumer behaviour, which may be reflected in the recent downgrade. Investors should monitor upcoming quarterly results and management commentary for clearer guidance on growth prospects and margin sustainability.

Investor Implications and Outlook

For investors, the current surge in derivatives activity signals a period of heightened volatility and uncertainty for Hindustan Unilever. The mixed signals from price action and open interest suggest that market participants are hedging bets or positioning for a potential directional move, but consensus remains elusive.

Given the downgrade to a Sell rating and the stock’s recent underperformance, cautious investors may prefer to reduce exposure or await clearer signs of trend reversal. Conversely, traders with a higher risk appetite might explore option strategies to capitalise on expected volatility, such as straddles or protective puts.

Monitoring changes in open interest alongside volume and price trends will be crucial in the coming sessions to gauge whether the market is leaning towards a sustained recovery or further correction.

Conclusion

Hindustan Unilever Ltd’s notable open interest increase in derivatives on 12 Feb 2026 highlights a significant shift in market positioning amid a backdrop of price weakness and sectoral challenges. While technical indicators provide some support, the downgrade in Mojo Grade and falling investor participation caution against complacency. Investors should remain vigilant, balancing the stock’s large-cap stability against emerging risks and evolving market sentiment.

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