ITC Ltd Sees Surge in Call Option Activity Ahead of February Expiry

Call Option Activity Highlights

On 6 February 2026, ITC Ltd. emerged as one of the most actively traded stocks in the call options segment. The most traded call options were concentrated at the ₹343.5 and ₹320 strike prices, both expiring on 24 February 2026. The ₹343.5 strike saw 12,520 contracts traded, generating a turnover of ₹156.25 lakhs, with an open interest of 9,119 contracts. Meanwhile, the ₹320 strike price recorded even higher volume with 14,600 contracts traded, commanding a turnover of ₹1,359.55 lakhs and an open interest of 2,851 contracts.

These figures are significant when compared to the underlying stock price of ₹322.05, indicating that traders are positioning for a potential upward move beyond the current market level. The high open interest at the ₹343.5 strike suggests sustained interest in calls that are out-of-the-money but within reach if the stock rallies in the coming weeks.

Stock Performance and Market Context

ITC Ltd. recorded a robust 5.37% gain on the day, outperforming its own one-day return of 5.21% but slightly lagging the Cigarettes/Tobacco sector’s 5.78% advance. Despite this, the stock underperformed the sector by 1.12%, reflecting some investor caution. The stock touched an intraday high of ₹323.6, marking a 4.32% rise, yet the weighted average price indicates that most volume traded closer to the day’s low, hinting at some resistance at higher levels.

Technically, ITC’s price is trading above its 5-day moving average but remains below its 20-day, 50-day, 100-day, and 200-day moving averages. This mixed technical picture suggests a short-term rebound within a longer-term consolidation phase. The stock’s delivery volume on 5 February was 1.02 crore shares, down 39.01% from the five-day average, signalling reduced investor participation despite the price uptick.

ITC’s market capitalisation stands at a substantial ₹3,86,715 crores, categorising it as a large-cap stock with a Market Cap Grade of 1. The company’s current Mojo Score is 51.0, upgraded from a previous Sell rating to a Hold on 4 February 2026, reflecting a cautious but improving outlook from analysts.

Investor Sentiment and Dividend Appeal

Despite the mixed technical signals, ITC Ltd. continues to attract investors with its attractive dividend yield of 4.19% at the current price level. This yield remains one of the highest in the FMCG sector, providing a cushion for investors amid market volatility. The stock’s liquidity is also notable, with the ability to handle trade sizes of approximately ₹17.27 crores based on 2% of the five-day average traded value, ensuring smooth execution for institutional and retail participants alike.

The recent upgrade in the Mojo Grade from Sell to Hold reflects a tempered optimism among analysts, who acknowledge the company’s strong fundamentals but remain cautious about near-term price momentum. The FMCG sector, particularly the Cigarettes/Tobacco segment, has been buoyant, gaining 5.78% on the day, which supports the case for ITC’s potential upside.

Options Expiry and Strike Price Dynamics

The expiry date of 24 February 2026 is less than three weeks away, and the concentration of call option activity near the ₹320 and ₹343.5 strike prices suggests traders are positioning for a meaningful price move within this timeframe. The ₹320 strike is slightly in-the-money, given the current underlying price of ₹322.05, while the ₹343.5 strike is out-of-the-money but within a plausible rally range if bullish momentum sustains.

Open interest data reveals that the ₹343.5 strike has a significantly higher open interest than the ₹320 strike, indicating that more traders are betting on a rally beyond this level. This could be interpreted as a sign of confidence in ITC’s near-term prospects, possibly driven by expectations of strong quarterly results, sector tailwinds, or positive macroeconomic factors.

Comparative Sector and Market Analysis

While ITC has underperformed the sector slightly on the day, the overall Cigarettes/Tobacco segment’s 5.78% gain underscores robust investor appetite for defensive, high-yield stocks amid broader market uncertainty. The Sensex was largely flat, declining marginally by 0.02%, highlighting the relative strength of FMCG stocks like ITC in the current environment.

Outlook and Investor Takeaways

For investors analysing ITC Ltd., the current surge in call option activity is a clear indicator of bullish sentiment, particularly among traders looking to capitalise on a potential price rally before the February expiry. The concentration of open interest at strike prices above the current market level suggests expectations of upside momentum, supported by the stock’s attractive dividend yield and sector strength.

However, the technical setup remains mixed, with the stock trading below several key moving averages, signalling that investors should exercise caution and monitor price action closely. The recent upgrade to a Hold rating by MarketsMOJO reflects this balanced view, acknowledging the company’s solid fundamentals while recognising near-term uncertainties.

Given the stock’s liquidity and sizeable market capitalisation, ITC remains a viable option for both institutional and retail investors seeking exposure to the FMCG sector’s defensive qualities. The ongoing call option interest provides an additional layer of insight into market expectations, which could prove valuable for timing entry and exit points.

Overall, ITC Ltd. presents a compelling case for investors favouring dividend income and sector stability, while the active options market highlights the potential for price appreciation in the near term.

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