Call Option Activity Highlights
On 14 January 2026, ITC Ltd. emerged as the most active stock in call options, with 12,635 contracts traded for the 27 January expiry at the ₹370 strike price. This activity generated a turnover of approximately ₹74.8 lakhs, reflecting significant investor interest in bullish positioning. The open interest for these call options stands at 19,244 contracts, indicating sustained commitment from market participants ahead of the expiry date.
The underlying stock price of ITC Ltd. was ₹334.05 on the day, substantially below the ₹370 strike price, suggesting that traders are speculating on a considerable upside move within the next two weeks. This positioning may be driven by expectations of a turnaround or a technical rebound from recent lows.
Price and Technical Overview
ITC Ltd. hit a new 52-week low of ₹333.65 on the same day, underscoring the stock's recent weakness. The share price is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a persistent downtrend. This technical backdrop contrasts with the bullish call option activity, highlighting a divergence between option traders’ optimism and the stock’s current momentum.
Investor participation has also waned, with delivery volumes on 13 January falling by 42.43% compared to the five-day average, indicating reduced conviction among long-term holders. Despite this, liquidity remains adequate, with the stock supporting trade sizes up to ₹20.51 crores based on 2% of the five-day average traded value, ensuring that option and stock trades can be executed without significant market impact.
Fundamental Assessment and Market Sentiment
ITC Ltd. operates in the FMCG sector and holds a large-cap market capitalisation of ₹4,19,282 crores. However, its current MarketsMOJO score stands at 48.0, with a Mojo Grade of Sell, downgraded from Hold as of 29 December 2025. This downgrade reflects concerns over the company’s recent performance metrics and outlook, which have deteriorated relative to sector peers.
The stock’s one-day return was marginally negative at -0.01%, underperforming the sector’s 0.07% gain and slightly outperforming the Sensex’s -0.09% decline. This relative underperformance, combined with the technical weakness and falling investor participation, paints a cautious picture for ITC’s near-term prospects.
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Interpreting the Bullish Call Option Positioning
The heavy call option activity at the ₹370 strike price, which is nearly 10% above the current stock price, suggests that traders are betting on a sharp recovery or a positive catalyst emerging before the January expiry. Such positioning could be driven by expectations of improved earnings, favourable policy announcements, or sectoral tailwinds in FMCG.
However, the significant gap between the strike price and the current market price implies that these calls are out-of-the-money, carrying higher risk but also higher potential reward. The open interest build-up indicates that some investors may be using these options for hedging or speculative purposes, anticipating volatility in the coming weeks.
Sector and Market Context
The FMCG sector has shown modest gains recently, with a 0.07% increase on the day, contrasting with ITC’s flat to negative performance. This divergence may reflect company-specific challenges such as margin pressures, competitive intensity, or slower volume growth. Investors should weigh these factors carefully against the bullish option activity, which may be driven by short-term speculative flows rather than fundamental improvement.
Given ITC’s large-cap status and liquidity profile, the stock remains a key focus for institutional investors and traders alike. The current scenario presents a nuanced picture where option market optimism coexists with fundamental caution and technical weakness.
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Investor Takeaways and Outlook
Investors analysing ITC Ltd. should consider the mixed signals emanating from the market. The surge in call option volumes at elevated strike prices indicates speculative bullishness or hedging strategies anticipating a rebound. Yet, the fundamental downgrade to a Sell grade and the stock’s technical underperformance counsel caution.
For long-term investors, the current low price levels may offer an opportunity to accumulate, provided there is a clear improvement in earnings growth and margin expansion. Traders, meanwhile, might view the active call options as a chance to capitalise on short-term volatility, but must remain mindful of the risks inherent in out-of-the-money options.
Monitoring upcoming quarterly results, sector developments, and broader market trends will be crucial in assessing whether ITC can reverse its downtrend and justify the bullish option positioning.
Summary
In summary, ITC Ltd. presents a compelling case of contrasting market dynamics: a large volume of call options traded at a strike price well above the current market level amid a backdrop of fundamental weakness and technical decline. This scenario underscores the importance of a balanced approach, combining option market insights with rigorous fundamental and technical analysis to inform investment decisions.
As expiry approaches on 27 January 2026, the evolution of open interest and price action will provide clearer signals on the sustainability of the bullish sentiment reflected in the options market.
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