Open Interest and Volume Dynamics
On 20 Feb 2026, Info Edge’s open interest (OI) in derivatives rose sharply to 60,250 contracts from 54,322 the previous day, marking an increase of 5,928 contracts or 10.91%. This rise in OI was accompanied by a futures volume of 20,007 contracts, indicating active participation in the derivatives market. The futures value stood at approximately ₹50,899 lakhs, while the options segment exhibited an enormous notional value of ₹3,239 crore, culminating in a total derivatives value of ₹51,209 lakhs.
Despite this surge in derivatives activity, the underlying stock price declined to ₹1,081.7, a new 52-week low, underperforming its sector by 0.38% and falling 0.81% on the day. The stock has been on a downward trajectory for three consecutive sessions, losing 3.7% over this period. The weighted average price of traded volumes clustered near the day’s low, signalling selling pressure.
Market Positioning and Sentiment
The increase in open interest amid falling prices typically suggests that fresh short positions are being initiated, or existing shorts are being added to, reflecting bearish sentiment among derivatives traders. This is corroborated by the stock trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a sustained downtrend.
Investor participation in the cash segment has also diminished, with delivery volumes dropping by 42.6% to 6.31 lakh shares on 19 Feb compared to the five-day average. This decline in delivery volume suggests that long-term investors are either exiting or sidelining their positions, while short-term traders dominate the market action.
Sector and Market Context
Info Edge operates within the E-Retail and E-Commerce sector, a space that has seen mixed performance recently. While the sector index recorded a modest decline of 0.38% on the day, the broader Sensex advanced by 0.58%, highlighting a divergence between Info Edge’s performance and the overall market trend. The company’s market capitalisation stands at ₹71,002 crore, categorising it as a mid-cap stock with moderate liquidity, capable of supporting trade sizes up to ₹4.6 crore based on recent average traded values.
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Implications of Derivatives Activity
The sharp rise in open interest alongside declining prices often indicates that traders are building bearish positions, anticipating further downside. This is consistent with Info Edge’s recent downgrade by MarketsMOJO from a Hold to a Sell rating on 1 Jul 2025, reflecting deteriorated fundamentals or valuation concerns. The company’s Mojo Score currently stands at 43.0, reinforcing the cautious stance.
Options market data, with a notional value exceeding ₹3,239 crore, suggests significant hedging or speculative activity. The large options value relative to futures indicates that traders may be employing complex strategies such as protective puts or bearish spreads to capitalise on expected volatility or downside risk.
Technical and Fundamental Considerations
Technically, Info Edge’s failure to hold above key moving averages and the formation of a new 52-week low point to a weak price structure. The declining delivery volumes further imply reduced conviction among long-term holders. Fundamentally, the downgrade to a Sell grade and a low market cap grade of 2 signal underlying challenges, possibly related to growth prospects or competitive pressures in the e-commerce space.
Investors should be wary of the current market positioning, as the derivatives market appears to be pricing in further downside risk. However, the sizeable liquidity and active options market also provide opportunities for tactical trades, especially for those looking to hedge or speculate on volatility.
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Investor Takeaway
Info Edge’s recent derivatives activity highlights a market increasingly positioned for downside risk. The 10.9% jump in open interest amid falling prices and weak delivery volumes suggests that traders are either initiating or adding to short positions. This aligns with the company’s current Sell rating and subdued Mojo Score, signalling caution for investors.
While the stock remains liquid enough for sizeable trades, the technical and fundamental indicators point to a challenging near-term outlook. Investors should closely monitor open interest trends and volume patterns for signs of a potential reversal or further deterioration. Additionally, the active options market offers avenues for hedging or tactical plays amid heightened volatility.
Given the sector’s mixed performance and Info Edge’s underperformance relative to the Sensex, a careful reassessment of portfolio exposure is warranted. Those holding the stock may consider exploring peer comparisons and alternative investments within the e-retail and e-commerce space to optimise returns and manage risk effectively.
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