Open Interest and Volume Dynamics
On 23 Feb 2026, Indian Bank's open interest (OI) in futures and options contracts surged to 27,876 from the previous 22,445, marking a substantial increase of 5,431 contracts or 24.2%. This sharp rise in OI was accompanied by a daily volume of 67,468 contracts, indicating strong participation from traders and investors. The futures value stood at approximately ₹98,760.85 lakhs, while the options segment exhibited an enormous notional value of ₹56,739.18 crores, underscoring the stock's prominence in the derivatives market.
The total combined value of derivatives traded was ₹1,04,530.01 lakhs, reflecting a highly liquid and active market for Indian Bank's contracts. The underlying stock price closed near its intraday high at ₹979, reinforcing the bullish undertone.
Price Performance and Technical Strength
Indian Bank has been on a consistent upward trajectory, gaining 5.7% over the last two trading sessions. On the day of the OI surge, the stock outperformed its public sector banking peers by 2.62%, delivering a 3.31% gain compared to the sector's 0.93% and the Sensex's 0.44%. The stock also traded above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling strong technical momentum and investor confidence.
Delivery volumes further corroborate this trend, with 7.38 lakh shares delivered on 20 Feb 2026, a 2.63% increase over the five-day average, indicating rising investor participation and conviction in the stock's prospects.
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Market Positioning and Directional Bets
The pronounced increase in open interest alongside rising volumes suggests that market participants are establishing fresh positions rather than merely closing existing ones. This pattern typically indicates a strong directional conviction. Given the concurrent price appreciation and technical strength, it is reasonable to infer that the majority of these new positions are bullish bets on Indian Bank's near-term upside potential.
Options data further supports this view. The substantial notional value in the options segment points to active call option buying, which is often a proxy for bullish sentiment. The stock’s recent breakout to an all-time high at Rs 985.8 has likely attracted momentum traders and institutional investors seeking to capitalise on the upward trend.
Fundamental and Market Context
Indian Bank, a mid-cap public sector bank with a market capitalisation of ₹1,31,854.30 crores, has been steadily improving its operational metrics and market standing. The MarketsMOJO Mojo Score of 72.0 and an upgraded Mojo Grade from Hold to Buy on 6 Feb 2026 reflect enhanced confidence in the bank’s fundamentals and growth prospects.
The bank’s liquidity profile remains robust, with the stock’s traded value supporting sizeable trade sizes up to ₹3.46 crores based on 2% of the five-day average traded value. This liquidity ensures that institutional investors can enter or exit positions without significant price impact, further encouraging active participation in the derivatives market.
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Implications for Investors
The surge in open interest combined with strong price action and technical indicators suggests that Indian Bank is currently favoured by market participants as a promising investment opportunity. The upgraded Mojo Grade to Buy and a solid Mojo Score of 72.0 reinforce the stock’s attractiveness from a fundamental perspective.
Investors should note the stock’s consistent outperformance relative to its sector and the broader market, as well as its ability to sustain gains above key moving averages. These factors, coupled with rising delivery volumes, indicate genuine investor interest rather than speculative trading.
However, as with any mid-cap stock, investors should remain mindful of potential volatility and monitor broader macroeconomic factors impacting the banking sector. The current derivatives market positioning suggests a bullish bias, but prudent risk management remains essential.
Looking Ahead
Given the current market dynamics, Indian Bank appears well-positioned to continue its upward momentum in the near term. The strong open interest growth in derivatives signals that traders are anticipating further price appreciation, potentially driven by improving fundamentals and positive sectoral trends.
Market participants should watch for sustained volume and OI growth as confirmation of this trend, alongside any changes in macroeconomic indicators or regulatory developments affecting public sector banks.
Summary
Indian Bank’s recent sharp increase in open interest and trading volumes in the derivatives market, combined with its breakout to a new 52-week high and upgraded fundamental ratings, point to a bullish market consensus. The stock’s liquidity, technical strength, and rising investor participation make it a compelling candidate for investors seeking exposure to the public sector banking space with a positive risk-reward profile.
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