Interglobe Aviation Sees Sharp Open Interest Surge Amid Bearish Technicals

Open Interest and Volume Dynamics

On 23 Feb 2026, Interglobe Aviation's open interest (OI) in futures and options contracts rose sharply to 1,08,770 contracts from 97,523 the previous session, marking an increase of 11,247 contracts or 11.53%. This surge in OI was accompanied by a substantial volume of 94,936 contracts traded, indicating robust participation from derivatives traders. The futures value stood at ₹1,88,244.26 lakhs, while the options segment contributed an overwhelming ₹5,13,210.50 crores in notional value, underscoring the scale of speculative and hedging activity.

The underlying stock price closed at ₹4,854, marginally down by 0.10%, underperforming the sector's decline of 0.07% and contrasting with the broader Sensex gain of 0.44%. This divergence suggests that while the broader market showed resilience, Interglobe Aviation faced selling pressure, possibly reflecting concerns over near-term fundamentals or sector-specific headwinds.

Market Positioning and Directional Bets

The increase in open interest alongside high volumes typically signals fresh capital entering the market, either through new long or short positions. Given the stock's negative price momentum—trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages—market participants appear to be positioning for further downside or volatility rather than a bullish reversal.

Delivery volumes on 20 Feb surged to 6.19 lakh shares, a 102.31% rise compared to the five-day average, indicating rising investor participation in the cash segment. However, the stock's liquidity, gauged at 2% of the five-day average traded value, supports a trade size of approximately ₹6.64 crores, which is moderate for a large-cap airline stock. This liquidity profile allows institutional players to manoeuvre sizeable positions without excessive market impact.

Technical and Fundamental Assessment

Interglobe Aviation's technical indicators remain subdued. The stock is trading below all key moving averages, signalling a sustained downtrend. This technical weakness is compounded by a MarketsMOJO Mojo Score of 33.0, categorised as a 'Sell' rating, downgraded from 'Hold' on 3 Dec 2025. The downgrade reflects deteriorating momentum and concerns over the airline's near-term outlook amid rising fuel costs and competitive pressures.

From a market capitalisation perspective, Interglobe Aviation is a large-cap stock valued at ₹1,87,456.95 crores, yet it holds a Market Cap Grade of 1, indicating limited upside potential relative to its size and sector peers. The airline industry continues to face challenges including fluctuating passenger demand, regulatory uncertainties, and geopolitical risks, which weigh on investor sentiment.

Derivative Market Insights

The surge in open interest, particularly in options contracts with a notional value exceeding ₹5 lakh crores, suggests that traders are actively hedging or speculating on significant price movements. The elevated OI combined with declining prices often points to increased short interest or protective put buying, signalling bearish or cautious market positioning.

Moreover, the futures market's sizeable value of ₹1,88,244.26 lakhs indicates that institutional investors may be employing futures contracts to hedge existing equity exposures or to take directional bets on the stock's trajectory. The interplay between futures and options volumes can provide clues about market expectations for volatility and directional shifts.

Sector and Market Context

The airline sector has experienced mixed performance recently, with Interglobe Aviation's 1-day return of -0.12% slightly underperforming the sector's -0.07% decline. Meanwhile, the Sensex advanced 0.44%, reflecting broader market resilience despite sector-specific headwinds. This divergence highlights the challenges faced by airline stocks, including rising operational costs and fluctuating demand patterns.

Investor focus remains on fuel price volatility, international travel restrictions, and competitive fare pressures, all of which could influence Interglobe Aviation's earnings trajectory. The current derivative market activity suggests that traders are bracing for continued uncertainty, with increased open interest signalling anticipation of significant price movements in the near term.

Implications for Investors

For investors, the surge in open interest combined with subdued price action and a negative technical setup warrants caution. The downgrade to a 'Sell' Mojo Grade reinforces the view that Interglobe Aviation may face further downside risks before stabilising. Active traders might consider monitoring option open interest changes and futures positioning to gauge shifts in market sentiment and potential volatility spikes.

Long-term investors should weigh the airline's fundamental prospects against sector challenges and broader economic conditions. While the stock remains a large-cap heavyweight in the airline space, its current momentum and market positioning suggest limited near-term upside, favouring a defensive stance or selective exposure.

Conclusion

Interglobe Aviation's recent open interest surge in derivatives reflects heightened market engagement amid a bearish technical backdrop and cautious investor sentiment. The combination of increased volumes, elevated futures and options values, and a downgrade in Mojo Grade signals that market participants are positioning for potential downside or volatility. Investors should remain vigilant, analysing derivative market trends alongside fundamental and technical indicators to navigate the evolving landscape of this airline giant.

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