Stock Performance and Market Context
On 1 January 2026, ITC Ltd. closed sharply lower, down 5.89% on the day, underperforming the broader Sensex which gained 0.15%. The stock touched an intraday low of ₹385, marking a new 52-week low and trading below all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical weakness is compounded by falling investor participation, with delivery volumes dropping by 45.53% compared to the five-day average, signalling waning conviction among shareholders.
The FMCG sector, particularly the Cigarettes/Tobacco segment where ITC operates, also faced pressure, declining 4.71% on the same day. Despite this, ITC marginally outperformed its sector by 0.92%, suggesting some relative resilience amid broad weakness.
Intense Call Option Activity
Contrary to the bearish price action, call options on ITC have seen robust trading volumes and open interest, particularly for contracts expiring on 27 January 2026. The most active strike prices are clustered around and above the current underlying value of ₹385.3, indicating a notable degree of bullish positioning or hedging strategies by market participants.
Key data points include:
- Strike ₹390: 6,692 contracts traded, turnover of ₹652.07 lakhs, open interest at 2,722 contracts.
- Strike ₹395: 6,596 contracts traded, turnover of ₹513.96 lakhs, open interest at 2,653 contracts.
- Strike ₹405: 6,414 contracts traded, turnover of ₹205.25 lakhs, open interest at 5,368 contracts.
- Strike ₹410: 8,611 contracts traded, turnover of ₹169.46 lakhs, open interest at 8,768 contracts.
- Strike ₹420: 2,915 contracts traded, turnover of ₹26.12 lakhs, open interest at 2,814 contracts.
The concentration of open interest at the ₹405 and ₹410 strikes, both significantly above the current stock price, suggests that traders are positioning for a potential rebound or are employing complex option strategies to capitalise on volatility. The ₹410 strike, in particular, stands out with the highest open interest of 8,768 contracts, reflecting strong interest at this level.
Built for the long haul! Consecutive quarters of strong growth landed this Small Cap from Chemicals on our Reliable Performers list. Sustainable gains are clearly ahead!
- - Long-term growth stock
- - Multi-quarter performance
- - Sustainable gains ahead
Mojo Score and Analyst Ratings
ITC Ltd. currently holds a Mojo Score of 46.0, categorised as a Sell grade by MarketsMOJO, reflecting a downgrade from a previous Hold rating on 29 December 2025. The downgrade underscores concerns over the stock’s near-term outlook amid weakening price momentum and sector headwinds. The company’s market capitalisation stands at a substantial ₹5,04,917 crores, placing it firmly in the large-cap category, but its Market Cap Grade is rated at 1, indicating limited upside potential relative to peers.
These ratings and scores provide a cautionary signal for investors, especially given the stock’s recent underperformance and technical breakdown below key support levels.
Expiry Patterns and Investor Sentiment
The expiry date of 27 January 2026 for the most active call options is less than a month away, suggesting that traders are positioning for a short-term recovery or volatility spike. The clustering of strike prices above the current market price indicates a speculative or hedging stance, possibly anticipating a rebound driven by upcoming corporate developments or sectoral shifts.
However, the high turnover and open interest at these strikes also imply that some investors may be employing spread strategies or protective calls to mitigate downside risk while maintaining upside exposure.
Liquidity and Trading Considerations
ITC’s liquidity remains adequate for sizeable trades, with a 2% threshold of the five-day average traded value supporting trade sizes up to ₹13.91 crores. This liquidity facilitates active options trading and allows institutional and retail investors to execute strategies without significant market impact.
Nevertheless, the sharp decline in delivery volumes and the stock’s failure to hold above critical moving averages suggest caution. Investors should weigh the elevated option activity against the fundamental and technical backdrop before committing capital.
Considering ITC Ltd.? Wait! SwitchER has found potentially better options in FMCG and beyond. Compare this large-cap with top-rated alternatives now!
- - Better options discovered
- - FMCG + beyond scope
- - Top-rated alternatives ready
Outlook and Investor Takeaways
While the surge in call option volumes at strikes above the current price may suggest bullish speculation or hedging, the fundamental and technical indicators for ITC Ltd. remain subdued. The downgrade to a Sell rating, the breach of multiple moving averages, and the sectoral weakness all point to a challenging near-term environment.
Investors should approach ITC with caution, considering the possibility of further downside or sideways consolidation before any meaningful recovery. The active options market, however, offers opportunities for sophisticated traders to capitalise on volatility or construct hedged positions.
Given the stock’s large market cap and liquidity, it remains a key FMCG name to watch, but the current signals favour a defensive stance until clearer signs of a turnaround emerge.
Summary
ITC Ltd.’s stock performance and options market activity present a nuanced picture. Despite the stock hitting a 52-week low and receiving a Sell grade downgrade, call option trading remains robust, particularly at strikes above the current price for the January expiry. This divergence highlights a market grappling with uncertainty, where some investors are betting on a rebound while others remain cautious. The coming weeks will be critical in determining whether ITC can stabilise or if further declines are imminent.
Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Today
