Open Interest and Volume Dynamics
On 23 Feb 2026, IOC’s open interest in derivatives rose sharply to 43,328 contracts from the previous 39,011, marking an increase of 4,317 contracts or 11.07%. This expansion in OI is significant as it indicates fresh capital entering the market rather than existing positions being squared off. The volume for the day stood at 23,386 contracts, supporting the OI growth and signalling active participation by market players.
The futures value associated with IOC’s derivatives reached ₹71,640.20 lakhs, while the options segment exhibited an enormous notional value of approximately ₹13,133.95 crores. The combined total derivatives value stood at ₹73,542.96 lakhs, underscoring the substantial liquidity and interest in IOC’s contracts.
Such a rise in open interest alongside robust volume typically points to new directional bets being placed, often interpreted as a confirmation of the prevailing trend or anticipation of a forthcoming price move.
Price Action and Technical Context
IOC’s underlying stock price closed at ₹175, just 3.62% shy of its 52-week high of ₹182.25, demonstrating resilience and near-term strength. The stock outperformed its sector by 1.12% on the day, registering a 1.39% gain compared to the sector’s modest 0.08% rise and the Sensex’s 0.33% advance.
Intraday, IOC touched a high of ₹177.30, up 2.02%, signalling bullish momentum. The price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, though it is slightly below the 5-day moving average, suggesting a short-term consolidation phase amid a longer-term uptrend.
Investor participation has also increased, with delivery volumes rising to 53.49 lakh shares on 20 Feb, a 9.87% increase over the five-day average. This indicates genuine accumulation rather than speculative trading, reinforcing the positive technical outlook.
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Market Positioning and Directional Bets
The surge in open interest, combined with rising volumes and price appreciation, strongly suggests that market participants are positioning for an upward move in IOC’s stock. The increase in OI by over 4,300 contracts is indicative of fresh long positions being established rather than short covering, which would typically reduce OI.
Given the stock’s proximity to its 52-week high and the strong fundamentals underpinning the oil sector, traders appear confident in IOC’s near-term prospects. The company’s large market capitalisation of ₹2,48,830.34 crores and a high dividend yield of 4.62% further enhance its appeal as a stable income-generating asset amid volatile markets.
Moreover, the Mojo Grade upgrade from Buy to Strong Buy on 2 Feb 2026, with a Mojo Score of 87.0, reflects improved financial metrics, operational performance, and positive analyst sentiment. This upgrade likely contributed to increased investor interest and derivative activity.
Sector and Broader Market Context
IOC’s outperformance relative to the oil sector and the broader Sensex highlights its relative strength. While the sector posted a marginal 0.08% gain, IOC’s 1.39% rise underscores its leadership within the industry. This divergence often attracts institutional investors seeking alpha in large-cap oil stocks.
The stock’s liquidity profile is robust, with the ability to handle trade sizes of approximately ₹3.37 crores based on 2% of the five-day average traded value. This ensures that large investors can enter or exit positions without significant price impact, supporting sustained interest in derivatives.
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Implications for Investors
The current surge in open interest and volume in IOC derivatives, alongside positive price action and a strong fundamental backdrop, presents a compelling case for investors to consider increasing exposure to the stock. The strong buy rating and high Mojo Score reinforce confidence in the company’s growth trajectory and dividend sustainability.
However, investors should remain mindful of short-term volatility, as the stock is slightly below its 5-day moving average, indicating potential minor pullbacks or consolidation phases. Monitoring open interest trends and volume patterns in the coming sessions will be crucial to confirm sustained bullish momentum.
Overall, the data suggests that market participants are positioning for further gains in IOC, supported by solid sector fundamentals, improving investor participation, and favourable technical indicators.
Conclusion
Indian Oil Corporation Ltd’s recent open interest surge in derivatives marks a significant development in market positioning, signalling increased bullish sentiment. The combination of rising volumes, price strength near 52-week highs, and a strong fundamental rating upgrade to Strong Buy provides a robust framework for investors to analyse the stock’s potential.
As the oil sector continues to navigate global energy dynamics and domestic demand growth, IOC’s leadership position and attractive dividend yield make it a key stock to watch. The derivative market activity serves as an early indicator of investor conviction, suggesting that IOC could maintain its upward trajectory in the near term.
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