ITC Ltd Sees Surge in Call Option Activity Amid Bearish Technicals

Call Option Activity Highlights

On 22 January 2026, ITC Ltd. recorded the most active call options among FMCG stocks, with 23,018 contracts traded for the 27 January expiry at the ₹330 strike price. The turnover for these contracts reached ₹4.24 crores, reflecting significant investor interest. Open interest stands at 4,254 contracts, indicating sustained positions rather than purely speculative intraday trades.

The underlying stock price was ₹323.50 at the time, placing the ₹330 strike slightly out-of-the-money. This positioning suggests that traders are either anticipating a modest upside move or are employing call options as part of hedging or spread strategies.

Technical and Fundamental Backdrop

ITC’s technical indicators paint a cautious picture. The stock recently hit a new 52-week low of ₹321.05, underscoring persistent downward pressure. It is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained bearish trend. Investor participation has also waned, with delivery volumes on 21 January falling by 34.73% compared to the five-day average, suggesting reduced conviction among long-term holders.

Despite this, the stock managed a slight rebound after two consecutive days of decline, posting a modest 0.09% gain on the day, in line with the FMCG sector’s 0.01% rise but lagging behind the Sensex’s 0.48% advance. This mixed price action may be contributing to the increased call option activity as traders position for potential volatility or a technical bounce.

Mojo Score and Market Cap Considerations

ITC’s mojo score currently stands at 48.0, with a mojo grade of Sell, downgraded from Hold on 29 December 2025. This downgrade reflects deteriorating fundamentals or technicals as assessed by MarketsMOJO’s proprietary analytics. The company’s market capitalisation remains robust at ₹4,10,708 crores, categorising it as a large-cap stock with a market cap grade of 1, indicating high liquidity and institutional interest.

Expiry Patterns and Investor Positioning

The 27 January expiry is the nearest monthly expiry, and the concentration of call option volume at the ₹330 strike price is noteworthy. This strike is just ₹6.50 above the current market price, indicating that traders are positioning for a near-term recovery or at least a stabilisation above this level. The open interest of 4,254 contracts suggests that many investors are holding these positions into expiry, which could lead to increased volatility as the date approaches.

Such activity often reflects a mix of speculative bullish bets and hedging by institutional players. Given ITC’s recent downtrend and the downgrade to a Sell rating, some investors may be using call options to hedge short positions or to limit downside risk while maintaining upside exposure.

Liquidity and Trading Viability

ITC’s liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting trade sizes up to ₹13.13 crores based on 2% of the five-day average. This liquidity facilitates active options trading and allows institutional investors to enter and exit positions without significant market impact.

The delivery volume of 87.34 lakh shares on 21 January, although down from recent averages, still indicates a reasonable level of investor engagement. However, the decline in delivery volume may signal caution among long-term investors, possibly due to the stock’s technical weakness and the recent mojo downgrade.

Implications for Investors

The surge in call option activity at a strike price slightly above the current market level, combined with the stock’s technical weakness and mojo downgrade, presents a nuanced picture for investors. While the options market suggests some degree of bullish positioning or hedging, the fundamental and technical indicators caution against aggressive long exposure at this juncture.

Investors should closely monitor price action as the 27 January expiry approaches, particularly any shifts in open interest and volume that could signal a breakout or further decline. The stock’s inability to sustain levels above key moving averages remains a concern, and the recent 52-week low underscores the risk of continued downside.

Given ITC’s large-cap status and liquidity, it remains a viable candidate for strategic option plays, but the current mojo Sell rating advises prudence. Investors seeking exposure to FMCG may consider comparing ITC with other top-rated alternatives that offer stronger fundamental and technical profiles.

Outlook and Market Context

ITC’s performance today was largely inline with the FMCG sector, which itself showed marginal gains. The broader Sensex outperformed both, suggesting that ITC’s challenges are more company-specific than sector-driven. The downgrade from Hold to Sell by MarketsMOJO on 29 December 2025 reflects a reassessment of the company’s growth prospects and risk profile.

In the context of rising input costs and evolving consumer preferences, ITC faces headwinds that may limit near-term upside. The options market activity, while indicating some bullish bets, should be interpreted with caution given the stock’s technical and fundamental backdrop.

Conclusion

ITC Ltd.’s elevated call option volumes at the ₹330 strike for the upcoming expiry highlight active positioning amid a challenging market environment. While this may signal anticipation of a technical rebound or hedging activity, the stock’s recent 52-week low, trading below all major moving averages, and mojo downgrade to Sell suggest that investors should remain cautious. Monitoring open interest trends and price action in the coming days will be critical for assessing the sustainability of any recovery.

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