ITC Ltd Sees Heavy Call Option Activity Amid Bearish Technicals and Mixed Market Signals

Intense Call Option Trading Highlights Bullish Sentiment

Data from the derivatives market reveals that ITC Ltd. (NSE: ITC) has emerged as one of the most actively traded stocks in call options, with three key strike prices drawing significant investor interest. The 330 strike price call options saw 5,056 contracts traded, generating a turnover of ₹409.33 lakhs and an open interest of 7,141 contracts. Meanwhile, the 320 strike price calls recorded the highest volume with 4,964 contracts traded, turnover of ₹766.44 lakhs, and an open interest of 3,609. The 350 strike price calls, though relatively higher in strike, attracted 3,776 contracts with ₹86.39 lakhs turnover and an open interest of 9,462 contracts.

This concentrated activity in call options expiring on 24 February 2026 suggests that market participants are positioning for a potential rebound or at least a stabilisation above current levels, betting on ITC’s stock price moving closer to or beyond these strike prices within the next month.

Stock Performance and Technical Backdrop

Despite the bullish options activity, ITC’s underlying equity performance remains subdued. The stock closed at ₹316.45 on 30 January 2026, marking a fresh 52-week low. It marginally outperformed its FMCG sector peers by 0.43% on the day but lagged behind the broader Sensex, which declined by 0.48%. ITC’s one-day return stood at 0.86%, while the sector gained 1.27%.

Technically, ITC is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a persistent downtrend. Investor participation has also waned, with delivery volumes on 29 January falling by 32.25% compared to the five-day average, signalling reduced conviction among long-term holders. However, liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹16.79 crores, ensuring smooth execution for institutional and retail investors alike.

Fundamental Assessment and Rating Revision

ITC Ltd. currently holds a Market Capitalisation of ₹3,99,244 crores, categorising it as a large-cap stock within the FMCG sector. However, its fundamental momentum has deteriorated recently. The company’s Mojo Score stands at 48.0, reflecting a cautious outlook. This has led to a downgrade in its Mojo Grade from Hold to Sell as of 29 December 2025, signalling a less favourable risk-reward profile for investors.

The downgrade reflects concerns over ITC’s earnings growth prospects, competitive pressures in the FMCG space, and subdued volume growth. While the company remains a dominant player with a diversified portfolio, the current valuation and momentum metrics suggest limited upside in the near term.

Options Market Positioning Versus Fundamental Reality

The surge in call option volumes at strike prices of 320, 330, and 350, all above the current underlying price of ₹321.20, indicates that some market participants are betting on a recovery or a positive catalyst emerging before the February expiry. The highest open interest at the 350 strike price (9,462 contracts) is particularly notable, as it implies a significant number of traders expect the stock to rally nearly 9.3% from current levels within a month.

However, this optimism contrasts with the fundamental downgrade and technical weakness. The divergence suggests that speculative traders or hedgers may be using call options to express directional views or hedge existing positions, rather than reflecting broad-based confidence in ITC’s near-term outlook.

Expiry Patterns and Market Implications

With the 24 February 2026 expiry approaching, the concentration of call option activity at these strike prices will likely influence price dynamics. If the stock fails to approach these levels, option sellers may benefit from time decay, while buyers risk losses. Conversely, a positive earnings update, favourable policy changes, or sectoral tailwinds could trigger a sharp move upwards, validating the bullish positioning.

Investors should monitor open interest changes and volume trends closely in the coming weeks to gauge shifts in market sentiment. Additionally, the stock’s underperformance relative to the sector and Sensex, combined with its technical downtrend, warrants caution for those considering fresh long positions.

Investor Takeaway

While the active call option trading in ITC Ltd. signals a segment of the market anticipating a rebound, the broader fundamental and technical indicators counsel prudence. The downgrade to a Sell rating and the stock’s trading below all key moving averages highlight ongoing challenges. Investors should weigh the speculative nature of the options activity against the company’s current financial health and sector dynamics before making investment decisions.

For those inclined towards options strategies, the elevated open interest and turnover at strikes above the current price offer opportunities for directional bets or hedging, but these come with heightened risk given the stock’s recent volatility and downward momentum.

In summary, ITC Ltd. remains a stock under close watch, with its derivatives market activity providing a window into contrasting market views. The coming weeks will be critical in determining whether the bullish options positioning materialises into a sustained price recovery or remains a speculative outlier amid a challenging fundamental backdrop.

Unlock special upgrade rates for a limited period. Start Saving Now →