Indian Oil Corporation Sees Significant Open Interest Surge Signalling Bullish Market Positioning

Open Interest and Volume Dynamics

On 23 Feb 2026, IOC's open interest in futures and options contracts rose sharply to 44,842 from the previous 39,011 contracts, marking an increase of 5,831 contracts or 14.95%. This surge in OI is complemented by a daily volume of 27,009 contracts, indicating strong participation from market players. The combined futures and options value stands at approximately ₹9,35,02.32 lakhs, with futures contributing ₹91,489.08 lakhs and options dominating at ₹14,262,842.83 lakhs, underscoring the substantial liquidity and interest in IOC derivatives.

The underlying stock price closed at ₹175, just 3.35% shy of its 52-week high of ₹182.25, signalling sustained strength. Intraday, the stock touched a high of ₹177.30, gaining 2.02% on the day and outperforming the oil sector by 1.18%. This price action, coupled with rising OI, suggests that market participants are increasingly confident in IOC's near-term prospects.

Market Positioning and Directional Bets

The notable increase in open interest alongside rising prices typically indicates fresh long positions being established rather than short covering. This is further supported by IOC trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which confirms a strong uptrend and positive momentum. The stock’s delivery volume on 20 Feb was 53.49 lakh shares, up 9.87% from the five-day average, reflecting rising investor participation and conviction.

Investors appear to be positioning for a continuation of the upward trend, possibly anticipating favourable developments in crude oil prices, refining margins, or government policy support for the oil sector. The high dividend yield of 4.62% at the current price further enhances the stock’s appeal, providing income alongside capital appreciation potential.

Technical and Fundamental Context

IOC’s market capitalisation stands at a robust ₹2,48,660.89 crore, categorising it as a large-cap stock with significant institutional interest. The company’s Mojo Score of 87.0, upgraded from a previous Buy to a Strong Buy on 2 Feb 2026, reflects improved fundamentals and technical outlook. This upgrade signals enhanced confidence from analysts and market observers, reinforcing the bullish sentiment.

The stock’s ability to outperform the Sensex, which gained 0.44% on the same day, and the oil sector’s 0.33% rise, highlights its relative strength. The 1.32% one-day return for IOC compared to sector and benchmark indices suggests that investors are favouring IOC as a preferred play within the oil space.

Implications for Investors and Traders

The surge in open interest and volume, combined with positive price momentum, indicates that traders are likely taking directional bets on IOC’s upside potential. This could be driven by expectations of improving crude oil demand, refining margin expansion, or strategic government initiatives supporting the energy sector. The stock’s liquidity, with a trade size capacity of ₹3.37 crore based on 2% of the five-day average traded value, ensures that institutional and retail investors can execute sizeable trades without significant price impact.

However, investors should remain mindful of potential volatility given the global oil price fluctuations and geopolitical risks that can influence the sector. The proximity to the 52-week high also suggests that profit booking could emerge if the stock faces resistance near ₹182.25. Nonetheless, the strong technical setup and fundamental backing provide a compelling case for continued accumulation.

Outlook and Conclusion

Indian Oil Corporation Ltd’s recent open interest surge in derivatives markets is a clear indicator of growing bullish sentiment and increased investor engagement. The stock’s strong technical positioning above all major moving averages, coupled with a high dividend yield and market cap leadership, makes it an attractive proposition for both traders and long-term investors.

While the oil sector remains sensitive to external factors such as crude price volatility and regulatory changes, IOC’s robust fundamentals and improving market positioning provide a cushion against downside risks. The upgrade to a Strong Buy rating by MarketsMOJO further validates the stock’s potential to deliver superior returns in the near to medium term.

Investors should monitor open interest trends alongside price action to gauge the sustainability of this momentum. The current data suggests that fresh long positions are being built, signalling confidence in IOC’s growth trajectory and sector outlook.

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