ITC Ltd Sees Heavy Call Option Activity Amid Bearish Stock Momentum

Recent Stock Performance and Market Context

ITC Ltd. has been under pressure in recent sessions, hitting a new 52-week low of ₹302.85 on 2 February 2026. The stock has declined by 5.01% over the past two days, underperforming its FMCG sector peers, which fell by 1.00% on the same day. Despite this, ITC marginally outperformed the sector by 0.51% on the day, closing down 1.28% compared to the sector’s 1.00% fall. The broader Sensex, meanwhile, managed a modest gain of 0.22%.

Technically, ITC is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained downtrend. However, rising investor participation is evident, with delivery volumes surging to 2.93 crore shares on 30 January, a 77.28% increase over the five-day average. Liquidity remains robust, supporting trade sizes up to ₹22.74 crore comfortably.

Mojo Score Downgrade Reflects Caution

MarketsMOJO recently downgraded ITC Ltd.’s mojo grade from Hold to Sell on 29 December 2025, reflecting concerns over the company’s near-term outlook. The mojo score currently stands at 48.0, indicating weak fundamentals and limited upside potential. The market cap grade is 1, underscoring the stock’s large-cap status but also signalling valuation challenges.

Call Option Activity Highlights Bullish Speculation

Despite the bearish technicals and downgrade, call option activity in ITC has been notably heavy, suggesting that some market participants are betting on a recovery or a sharp rally before the 24 February 2026 expiry. The most active call options are clustered around strike prices of ₹310, ₹320, ₹330, and ₹350, all above the current underlying price of ₹305.4.

The ₹320 strike call option leads in volume with 6,162 contracts traded, generating a turnover of ₹310.56 lakhs and an open interest of 8,240 contracts. This is closely followed by the ₹330 strike with 4,271 contracts traded, turnover of ₹105.92 lakhs, and open interest of 10,858 contracts. The ₹310 strike, despite being closest to the current price, saw 3,652 contracts traded but with a significantly higher turnover of ₹385.65 lakhs, indicating higher premiums or volatility priced in. The ₹350 strike, the highest among the active strikes, recorded 3,279 contracts traded with turnover of ₹28.33 lakhs and open interest of 11,195 contracts.

The open interest figures at the ₹330 and ₹350 strikes are particularly telling, as they suggest sustained interest in these higher strike prices, which would require a substantial upward move in ITC’s share price to become profitable. This could indicate speculative positioning or hedging strategies by institutional players anticipating a rebound or volatility spike.

Expiry Patterns and Investor Sentiment

The 24 February 2026 expiry date is attracting significant open interest, with total call option contracts exceeding 17,000 across the four key strike prices. This concentration suggests that traders are positioning ahead of the expiry, possibly expecting volatility or a directional move in ITC’s stock price. The clustering of strikes between ₹310 and ₹350 indicates a bullish bias, as these levels represent upside targets ranging from approximately 1.5% to 14.5% above the current market price.

Such positioning may be driven by expectations of positive triggers such as quarterly earnings surprises, favourable regulatory developments, or sectoral tailwinds in FMCG. However, given the recent downgrade and technical weakness, these bets carry significant risk if the stock fails to rally.

Balancing Bullish Options with Bearish Fundamentals

While the call option volumes and open interest suggest optimism among some traders, the fundamental and technical backdrop remains cautious. ITC’s mojo grade downgrade to Sell reflects concerns about earnings growth and valuation pressures. The stock’s failure to hold above key moving averages and its recent 52-week low reinforce the bearish narrative.

Investors should weigh the speculative nature of the call option activity against the broader market signals. The elevated premiums and turnover at higher strike prices imply that option buyers are paying a premium for potential upside, which may not materialise if the stock continues its downward trajectory.

Outlook and Investor Takeaways

For investors considering ITC Ltd., the current environment presents a complex picture. The stock’s large-cap status and dominant FMCG presence provide a solid foundation, but the recent downgrade and technical weakness warrant caution. The heavy call option activity at strikes above the current price signals that some market participants are betting on a turnaround, but these positions are speculative and hinge on positive catalysts emerging in the near term.

Investors should monitor upcoming earnings releases, sector developments, and broader market trends closely. Those inclined towards options trading may find opportunities in the volatility, but should remain mindful of the risks associated with elevated premiums and the stock’s downtrend.

Overall, ITC Ltd. remains a stock to watch, with mixed signals from fundamental and derivative markets. Prudent investors may prefer to await clearer directional cues before increasing exposure.

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