Mphasis Ltd Sees Significant Open Interest Surge Amid Mixed Price Action

Open Interest and Volume Dynamics

The latest data reveals that Mphasis’s open interest (OI) in derivatives rose from 31,226 contracts to 34,642, an increase of 3,416 contracts or 10.94% on 29 Dec 2025. This substantial rise in OI indicates that new positions are being established rather than existing ones being closed, suggesting fresh interest from traders and investors in the stock’s future direction.

Volume for the day stood at 13,936 contracts, which, while robust, is slightly lower than the OI increase, implying that the market is absorbing new positions steadily rather than through a sudden spike in trading activity. The futures value associated with these contracts is approximately ₹45,938 lakhs, while the options market value dwarfs this at over ₹6,331 crores, underscoring the significant derivatives interest in Mphasis.

Price Performance and Moving Averages

Despite the open interest surge, Mphasis’s stock price has been under pressure, falling by 0.98% on the day and registering a 3.9% decline over the past three consecutive trading sessions. This contrasts with the sector’s 0.68% decline and the Sensex’s more modest 0.32% drop, indicating that Mphasis is slightly underperforming its peers.

Technically, the stock price remains above its 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it is trading below the shorter-term 5-day and 20-day moving averages, reflecting recent weakness and potential short-term bearish sentiment. This mixed technical picture suggests that while the broader trend remains intact, near-term caution prevails among investors.

Investor Participation and Liquidity Considerations

Investor participation appears to be waning, with delivery volume on 26 Dec falling sharply by 75.5% compared to the five-day average, down to 74,990 shares. This decline in delivery volume indicates reduced conviction among long-term holders or a shift towards more speculative trading in derivatives rather than outright stock accumulation.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹2.91 crores based on 2% of the five-day average traded value. This liquidity profile ensures that institutional and retail investors can execute trades without significant price impact, an important factor given the recent increase in derivatives activity.

Market Positioning and Directional Bets

The increase in open interest alongside a modest decline in price suggests that market participants may be positioning for a potential rebound or volatility in Mphasis shares. The rise in OI often reflects fresh bets being placed, either through long futures or option strategies, anticipating a directional move.

Given the stock’s current trading below short-term moving averages but above longer-term averages, traders might be speculating on a near-term correction bottoming out, with the possibility of a recovery rally. Alternatively, some participants could be hedging existing positions, using options to manage risk amid uncertain market conditions.

The substantial options market value, exceeding ₹6,331 crores, highlights the importance of options in the stock’s derivatives ecosystem. This large notional value points to active call and put writing, which can influence price dynamics through gamma and delta hedging activities by market makers.

Mojo Score Upgrade and Analyst Sentiment

Reflecting these developments, Mphasis’s Mojo Score has improved to 72.0, earning a Buy grade as of 23 Dec 2025, upgraded from a previous Hold rating. This upgrade signals enhanced confidence in the stock’s fundamentals and technical outlook by MarketsMOJO analysts, who factor in earnings prospects, valuation, and price momentum.

Despite the recent price softness, the mid-cap company, with a market capitalisation of ₹53,813.35 crores, remains a significant player in the Computers - Software & Consulting sector. The sector’s overall performance and Mphasis’s relative positioning will be key to watch in the coming weeks as investors digest the implications of the derivatives activity.

Implications for Investors

For investors, the surge in open interest combined with mixed price signals suggests a cautious approach. The derivatives market activity indicates that traders are actively positioning for potential volatility or directional moves, but the recent price decline and falling delivery volumes highlight some uncertainty among long-term holders.

Investors should monitor upcoming earnings announcements, sector developments, and broader market trends to gauge whether the current derivatives positioning translates into sustained price momentum. The stock’s liquidity and market cap grade of 2 support ease of trading, but the recent underperformance relative to the sector warrants careful risk management.

Overall, Mphasis remains a stock with solid fundamentals and improving analyst sentiment, but the recent open interest surge in derivatives underscores the importance of watching market positioning closely to anticipate possible price swings.

Conclusion

The notable increase in open interest for Mphasis Ltd. signals renewed market interest and potential directional bets amid a backdrop of recent price weakness and reduced investor participation. While the stock maintains a positive long-term technical setup and a Buy rating from MarketsMOJO, the short-term outlook appears mixed, with traders likely hedging or speculating on volatility. Investors should remain vigilant and consider both fundamental and technical factors when assessing Mphasis’s prospects in the near term.

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