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

Robust Call Option Trading Highlights Investor Sentiment

On 17 February 2026, ITC Ltd. (NSE: ITC) recorded its most active call option strike at ₹330, with 15,368 contracts traded, generating a turnover of ₹607.34 lakhs. The open interest at this strike price stands at 12,239 contracts, underscoring sustained investor interest in bullish bets. The underlying stock price hovered near ₹329.60, just shy of the ₹330 strike, indicating that traders are positioning for a potential upward move in the near term.

This heightened call option activity suggests that market participants are anticipating a rally or at least a stabilisation above the current levels, despite the stock’s recent underperformance relative to its sector. The FMCG sector gained 1.99% on the day, while ITC’s stock rose by a more modest 1.06%, underperforming the sector by 0.98%. This divergence may be driving speculative option plays as traders seek leveraged exposure to potential upside.

Technical Landscape: Mixed Signals Amid Rising Participation

Technically, ITC’s share price has been on a three-day consecutive gain streak, delivering a cumulative return of 4.41% during this period. The stock currently trades above its 5-day and 20-day moving averages, signalling short-term strength. However, it remains below its longer-term 50-day, 100-day, and 200-day moving averages, indicating that the broader trend remains subdued.

Investor participation has notably increased, with delivery volumes on 17 February reaching 2.47 crore shares, a sharp 174.36% rise compared to the five-day average. This surge in delivery volume reflects genuine buying interest rather than speculative intraday trading, which could provide a firmer foundation for price appreciation if sustained.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹13.5 crore based on 2% of the five-day average traded value. This liquidity profile facilitates active option market participation and allows institutional players to manoeuvre positions efficiently.

Mojo Grade Downgrade Reflects Caution Despite Option Market Optimism

Despite the bullish option activity, ITC’s fundamental assessment by MarketsMOJO has recently deteriorated. The company’s Mojo Score stands at 48.0, with a Mojo Grade downgraded from Hold to Sell on 9 February 2026. This downgrade reflects concerns over valuation, earnings momentum, or sectoral headwinds that may temper upside potential.

ITC’s market capitalisation remains substantial at ₹4,07,576 crore, categorising it as a large-cap stock. However, its Market Cap Grade is rated 1, indicating limited relative strength in market capitalisation metrics. Investors should weigh these fundamental signals against the technical and options market optimism when considering exposure.

Expiry Patterns and Strike Price Concentration

The 24 February 2026 expiry has attracted the bulk of call option interest, with the ₹330 strike price emerging as the focal point. This strike is effectively at-the-money, given the underlying price of ₹329.60, suggesting that traders are positioning for a breakout above this level in the coming week.

Open interest concentration at this strike price is significant, with 12,239 contracts outstanding. Such concentration often acts as a magnet for price action, as market makers and traders adjust hedges and positions around this level. A sustained move above ₹330 could trigger a short squeeze in options and underlying shares, potentially accelerating gains.

Sectoral Context and Comparative Performance

Within the FMCG sector, ITC’s recent performance has been somewhat muted. While the sector index advanced 1.99% on the day, ITC’s 1.06% gain lagged behind. This underperformance may reflect investor rotation into other FMCG names with stronger earnings momentum or more favourable valuations.

Nonetheless, ITC’s diversified business model, spanning cigarettes, packaged foods, and agribusiness, provides a defensive cushion amid market volatility. The stock’s ability to sustain gains above short-term moving averages and rising delivery volumes indicates that some investors are accumulating on dips, anticipating a sectoral rebound or company-specific catalysts.

Investor Takeaway: Balancing Option Market Optimism with Fundamental Caution

For investors and traders, the surge in call option activity at the ₹330 strike ahead of the 24 February expiry signals a clear bullish sentiment in the near term. The rising delivery volumes and short-term moving average support add technical credibility to this view.

However, the downgrade in Mojo Grade to Sell and the stock’s underperformance relative to its sector caution against overexuberance. The longer-term moving averages remain resistance levels that ITC must overcome to confirm a sustained uptrend.

Market participants should monitor price action around the ₹330 level closely, as a decisive breakout could validate the bullish option positioning and attract further buying interest. Conversely, failure to breach this strike price may lead to profit-taking and a reversion to the mean.

Given ITC’s large-cap status and liquidity profile, it remains a viable candidate for both strategic investors and tactical traders, provided risk management is carefully applied in light of the mixed signals.

Outlook and Strategic Considerations

Looking ahead, ITC’s performance will likely hinge on sectoral trends in FMCG, consumer demand dynamics, and company-specific developments such as product launches or regulatory changes. The option market’s positioning suggests that traders are optimistic about a near-term positive catalyst or technical breakout.

Investors should also consider the broader market environment, including macroeconomic factors and sentiment shifts, which could influence ITC’s trajectory. The stock’s current liquidity and delivery volume trends provide a solid foundation for active trading strategies, while fundamental caution advises a measured approach.

Summary

In summary, ITC Ltd. is experiencing a notable increase in call option activity centred on the ₹330 strike price with the 24 February expiry approaching. This reflects a bullish near-term outlook among option traders, supported by rising delivery volumes and short-term technical strength. However, the recent downgrade to a Sell rating by MarketsMOJO and underperformance relative to the FMCG sector temper enthusiasm. Investors should weigh these factors carefully, monitoring price action around key technical levels and staying alert to sectoral and macroeconomic developments.

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