Call Option Activity Highlights
On 12 January 2026, ITC Ltd. emerged as the most active stock in call options, with 10,193 contracts traded at the ₹370 strike price, generating a turnover of approximately ₹101.11 lakhs. The open interest at this strike stands at 19,280 contracts, indicating sustained interest from option traders. This activity is particularly striking given the underlying stock price of ₹338.05, suggesting that market participants are positioning for a potential rebound or volatility in the coming weeks.
Expiry and Strike Price Analysis
The call options expiring on 27 January 2026 have attracted the bulk of trading volume, reflecting a short-term horizon for bullish bets. The ₹370 strike price is roughly 9.4% above the current underlying value, implying that traders are anticipating a significant upside move within the next two weeks. This optimism contrasts with the stock’s recent performance, which has seen it hit a new 52-week low of ₹335.8 on the same day.
Stock Price and Technical Context
ITC’s share price has been under pressure, trading below all major moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical weakness is compounded by falling investor participation; delivery volumes on 9 January dropped by 25.15% compared to the five-day average, signalling reduced conviction among long-term holders. Despite this, the stock managed a modest gain of 0.33% on the day, slightly underperforming the FMCG sector’s 0.51% rise but outperforming the Sensex’s 0.19% advance.
Fundamental and Rating Overview
From a fundamental standpoint, ITC Ltd. carries a Market Capitalisation Grade of 1, reflecting its status as a large-cap entity with a market cap of ₹4,22,226 crores. However, its mojo score has deteriorated to 48.0, resulting in a downgrade from Hold to Sell on 29 December 2025. This downgrade reflects concerns over the company’s growth prospects and valuation metrics within the FMCG sector, which remains competitive and rapidly evolving.
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Investor Sentiment and Market Positioning
The heightened call option activity suggests that some investors are adopting a bullish stance, possibly anticipating a technical rebound or a positive trigger in the near term. However, the strike price chosen is significantly out-of-the-money, indicating that these positions may be speculative or hedging plays rather than conviction-driven bets. The open interest accumulation at ₹370 strike also points to a build-up of positions that could influence volatility as expiry approaches.
Sector and Benchmark Comparison
ITC’s performance remains largely in line with the FMCG sector, which has shown modest gains recently. The sector’s 1-day return of 0.51% slightly outpaces ITC’s 0.33%, reflecting stronger momentum among peers. The Sensex’s 0.19% gain further contextualises ITC’s relative performance, which is neither a clear outperformer nor a laggard on the day. This relative stability amidst a downtrend may explain the cautious optimism seen in options markets.
Liquidity and Trading Viability
Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting trade sizes up to ₹32.52 crores based on 2% of the five-day average. This liquidity ensures that both spot and derivatives markets remain accessible for institutional and retail participants, facilitating the observed options activity without excessive slippage or price impact.
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Outlook and Strategic Considerations
While the call option surge may indicate pockets of bullish sentiment, the broader technical and fundamental picture for ITC Ltd. remains cautious. The downgrade to a Sell mojo grade and the stock’s trading below all key moving averages suggest that investors should remain vigilant. The options market activity could be driven by short-term traders or hedgers rather than a broad-based recovery expectation.
Investors considering exposure to ITC should weigh the potential for a technical bounce against the risks posed by weak investor participation and sector competition. Monitoring open interest changes and strike price concentrations in the coming days will be crucial to gauge whether the bullish positioning in options translates into sustained price momentum.
Conclusion
ITC Ltd.’s recent call option activity highlights an intriguing divergence between derivatives market optimism and spot market caution. With a significant number of contracts at an out-of-the-money strike and a looming expiry date, the coming weeks will be telling for the stock’s directional bias. Investors and traders alike should carefully analyse both technical signals and fundamental updates to navigate this complex landscape effectively.
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