ITC Ltd Sees Robust Call Option Activity Ahead of February Expiry

Robust Call Option Activity Highlights Investor Sentiment

On 16 February 2026, ITC Ltd. emerged as the most active stock in call options, with 8,965 contracts traded for the 24 February expiry at the ₹320 strike price. The turnover for these contracts reached ₹514.95 lakhs, underscoring significant investor interest in leveraged bullish bets. Open interest stood at 5,278 contracts, indicating sustained positions rather than mere speculative spikes.

The underlying stock price at the time was ₹323.20, slightly above the strike price, which suggests that traders are positioning for a continuation of gains in the near term. This activity is particularly noteworthy given the stock’s recent performance and technical indicators.

Stock Performance and Technical Landscape

ITC Ltd. has been on a modest upward trajectory, gaining 2.53% over the past two trading sessions. The stock’s 1-day return was 1.29%, aligning closely with the FMCG sector’s 2.32% gain, while the broader Sensex declined by 0.22%. This relative outperformance within the sector highlights ITC’s resilience amid broader market volatility.

Technically, the stock is trading above its 5-day and 20-day moving averages, signalling short-term strength. However, it remains below its 50-day, 100-day, and 200-day moving averages, indicating that medium- to long-term momentum has yet to fully recover. This mixed technical picture may explain the cautious optimism reflected in the call option activity.

Investor participation, measured by delivery volume, has shown signs of waning. On 16 February, delivery volume was 80.9 lakh shares, down 25.27% compared to the 5-day average. This decline suggests that while speculative interest in options is rising, actual stock holding by investors is moderating.

Fundamental Assessment and Mojo Rating Update

ITC Ltd. is a large-cap company with a market capitalisation of ₹4,03,503.83 crores, firmly entrenched in the FMCG sector. Despite its size and sectoral prominence, the company’s mojo score has recently deteriorated. On 9 February 2026, its mojo grade was downgraded from Hold to Sell, with a current score of 48.0. This downgrade reflects concerns over valuation, growth prospects, or other fundamental metrics that have weakened relative to peers.

The market cap grade remains at 1, indicating the company’s large size but not necessarily translating into a positive outlook. This fundamental caution contrasts with the bullish positioning seen in the options market, suggesting a divergence between short-term trader sentiment and longer-term investor confidence.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the ₹320 strike price for the 24 February expiry is telling. This strike is just below the current market price, indicating that traders expect the stock to hold or push higher in the coming week. The sizeable open interest suggests that many participants are either hedging existing positions or speculating on a near-term rally.

Such positioning often precedes volatility around expiry dates, as traders adjust or close positions. The liquidity of ITC Ltd., with a 5-day average traded value sufficient to support trades up to ₹9.62 crores, facilitates this active options market.

Balancing Bullish Options Activity with Fundamental Caution

While the surge in call options signals bullish sentiment, the fundamental downgrade and mixed technical indicators counsel caution. Investors should weigh the short-term optimism against the company’s recent mojo downgrade and the broader sector dynamics.

ITC’s performance remains inline with the FMCG sector, which has shown resilience despite broader market headwinds. However, the stock’s inability to breach longer-term moving averages suggests that sustained gains may require stronger catalysts.

Outlook and Investor Considerations

For investors and traders, the current scenario presents a nuanced picture. The active call option market suggests that short-term traders are positioning for a potential upside, possibly driven by expectations of positive news flow or sectoral tailwinds. However, the fundamental downgrade and technical resistance levels imply that caution is warranted.

Investors should monitor upcoming corporate announcements, sector developments, and broader market trends to gauge whether the bullish options positioning will translate into sustained stock price appreciation. Additionally, the decline in delivery volumes indicates that long-term investor conviction may be softening, which could limit upside momentum.

Given ITC Ltd.’s large-cap status and significant market presence, it remains a key stock to watch within the FMCG sector. However, the current mojo grade of Sell advises a conservative stance, especially for risk-averse investors.

Summary

In summary, ITC Ltd. is experiencing a surge in call option activity concentrated at the ₹320 strike price ahead of the 24 February expiry, reflecting bullish short-term sentiment. This comes despite a recent downgrade in its mojo rating to Sell and mixed technical signals. The stock’s performance aligns with sector gains but faces resistance from longer-term moving averages and declining investor participation. Traders should balance the optimism in options markets with fundamental caution and monitor evolving market conditions closely.

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