Call Option Activity Highlights
The most active call options for ITC Ltd. are concentrated at the ₹340 strike price, with 5,373 contracts traded recently. This activity generated a turnover of ₹34.39 lakhs and an open interest of 11,581 contracts, indicating sustained interest from traders betting on a potential upside. The underlying stock closed at ₹327.65, hovering just 0.4% above its 52-week low of ₹325.5, suggesting that option traders may be positioning for a rebound from near-term lows.
Expiry and Strike Price Dynamics
The January 27 expiry date is less than a week away, which typically intensifies option market activity as traders adjust positions ahead of contract settlements. The ₹340 strike price is approximately 3.6% above the current underlying price, reflecting moderate optimism among market participants. The elevated open interest at this strike suggests that many investors are either hedging existing positions or speculating on a rally above this level within the coming days.
Stock Performance and Technical Context
ITC’s share price has been under pressure, trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical setup. The stock’s delivery volume on 20 January was 1.16 crore shares, down 11.44% compared to the five-day average, indicating waning investor participation. Despite this, the stock remains liquid enough to support sizeable trades, with a 2% threshold of the five-day average traded value equating to ₹14.55 crore.
Fundamental and Market Sentiment
ITC Ltd. is a large-cap company with a market capitalisation of ₹4,08,954 crore, operating in the FMCG sector. However, its mojo score has recently deteriorated to 48.0, resulting in a downgrade from Hold to Sell as of 29 December 2025. The market cap grade remains at 1, reflecting its large size but also signalling caution. The stock’s one-day return of 0.44% slightly outperformed the sector’s 0.21% gain and the Sensex’s 0.16% decline, but this marginal outperformance has not yet translated into a sustained uptrend.
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Investor Positioning and Market Implications
The surge in call option volume at the ₹340 strike price suggests that some investors are anticipating a rebound or a short-term rally in ITC’s shares. This could be driven by expectations of improved earnings, sectoral tailwinds, or technical oversold conditions prompting bargain hunting. However, the downgrade to Sell and the stock’s weak technical posture caution against excessive optimism.
Open interest data reveals that while there is significant call option interest, the underlying stock’s fundamentals and market sentiment remain subdued. The divergence between option market bullishness and the stock’s technical weakness may reflect speculative positioning rather than broad-based confidence.
Sector and Benchmark Comparison
Within the FMCG sector, ITC’s performance has been inline with peers on the day, but its mojo grade downgrade contrasts with some sector leaders maintaining stronger ratings. The Sensex’s slight decline of 0.16% on the same day underscores the cautious mood prevailing in the broader market. Investors should weigh ITC’s large-cap stability against its recent negative momentum and the mixed signals from derivatives markets.
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Outlook and Strategic Considerations
For investors, the current scenario presents a nuanced picture. The active call option interest at a strike price above the current market level indicates some degree of optimism or hedging activity. Yet, the fundamental downgrade and technical weakness suggest caution. Traders with a higher risk appetite may view the call option activity as an opportunity to capitalise on potential short-term rebounds, while long-term investors might prefer to await clearer signs of recovery or improved mojo scores.
Given ITC’s large-cap status and liquidity, it remains a key stock to watch within FMCG, but the mixed signals from both equity and derivatives markets warrant a balanced approach. Monitoring open interest trends and expiry day price action will be critical in assessing whether the bullish option positioning translates into sustained price gains or remains speculative.
Summary
In summary, ITC Ltd.’s recent call option activity highlights a surge in bullish bets at the ₹340 strike price ahead of the 27 January expiry, despite the stock’s proximity to its 52-week low and a downgrade to a Sell mojo grade. The stock’s technical indicators remain weak, and investor participation has declined, underscoring the need for caution. Market participants should carefully analyse both fundamental and technical factors before making investment decisions, considering alternative FMCG stocks with stronger ratings and momentum.
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