Mphasis Ltd. Sees Sharp Open Interest Surge Amid Bearish Market Signals

Open Interest and Volume Dynamics

On 19 Feb 2026, Mphasis recorded an open interest (OI) of 40,167 contracts in its derivatives, up sharply from 33,628 contracts the previous day, marking an increase of 6,539 contracts or 19.45%. This rise in OI is accompanied by a futures volume of 23,621 contracts, reflecting active participation in the derivatives market. The futures value stood at approximately ₹92,102.26 lakhs, while the options segment exhibited a substantial notional value of ₹6,757.72 crores, culminating in a total derivatives market value of ₹92,767.25 lakhs for the stock.

Such a pronounced increase in open interest typically indicates fresh positions being established rather than existing ones being squared off. However, the context of price movement is crucial to interpret the directional bias of these positions.

Price Performance and Moving Averages

Mphasis’s share price has been under pressure, declining by 1.85% on the day and underperforming its sector by 1.62%. Over the past two consecutive sessions, the stock has lost 2.9% in value, touching an intraday low of ₹2,386.20, down 2.04% from the previous close. Notably, the weighted average price of traded volumes has skewed towards the lower end of the day’s price range, suggesting selling pressure.

Technically, Mphasis is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reinforcing the bearish trend. This persistent weakness in price despite rising open interest points to a potential build-up of short positions or protective hedging by market participants.

Investor Participation and Liquidity Considerations

Investor participation appears to be waning, with delivery volumes on 18 Feb falling sharply by 70.54% to 1.49 lakh shares compared to the 5-day average. This decline in delivery volume suggests reduced conviction among long-term holders, potentially signalling profit booking or cautious stance amid the recent price weakness.

Despite this, liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting a trade size of approximately ₹4.48 crores based on 2% of the 5-day average traded value. This ensures that institutional and retail investors can execute orders without significant market impact.

Market Positioning and Directional Bets

The combination of rising open interest and falling prices typically indicates that new short positions are being initiated or that existing longs are being hedged through derivatives. Given Mphasis’s current Mojo Score of 44.0 and a downgrade from Hold to Sell on 1 Feb 2026, market participants appear to be positioning for further downside or increased volatility in the near term.

The stock’s market capitalisation stands at ₹45,584.88 crores, categorising it as a mid-cap entity within the Computers - Software & Consulting sector. Its relative underperformance against the Sensex, which declined 1.12% on the same day, and the sector’s modest fall of 0.29%, highlights the stock-specific pressures weighing on Mphasis.

Options Market Insights

The options segment’s notional value of ₹6,757.72 crores is substantial, indicating active hedging and speculative interest. The elevated open interest in options contracts may reflect a range of strategies, including protective puts by longs or speculative calls by contrarians. However, the overall sentiment, as inferred from price action and moving averages, leans bearish.

Implications for Investors

For investors, the current derivatives activity in Mphasis signals caution. The sharp rise in open interest amid falling prices and subdued delivery volumes suggests that bearish bets are gaining traction. The downgrade to a Sell rating by MarketsMOJO, with a Mojo Grade of 44.0, reinforces the view that the stock may face further downside pressure in the near term.

Investors should closely monitor the evolution of open interest and price action in the coming sessions. A sustained increase in open interest accompanied by stabilising or rising prices could indicate a shift in sentiment, whereas continued price weakness with rising OI would confirm bearish positioning.

Given the stock’s liquidity profile, institutional investors can manoeuvre sizeable trades, but retail investors should exercise prudence and consider alternative mid-cap opportunities within the sector that exhibit stronger technical and fundamental parameters.

Sector and Market Context

The Computers - Software & Consulting sector has shown mixed performance recently, with some stocks exhibiting resilience while others, like Mphasis, face headwinds. Broader market volatility and global macroeconomic uncertainties continue to influence investor behaviour, making derivative market signals an important barometer for positioning and risk management.

In this environment, derivative market data such as open interest and volume patterns provide valuable insights into the underlying sentiment and potential directional bets, enabling investors to make more informed decisions.

Conclusion

The surge in open interest for Mphasis Ltd. amid declining prices and falling delivery volumes highlights a growing bearish sentiment in the stock’s derivatives market. Coupled with a recent downgrade and underperformance relative to sector and benchmark indices, this suggests that investors are positioning for further downside or increased volatility. While liquidity remains sufficient for active trading, investors should approach Mphasis with caution and consider alternative mid-cap stocks with more favourable outlooks within the Computers - Software & Consulting sector.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today