Open Interest and Volume Dynamics
The latest data reveals that Mphasis’s open interest (OI) in derivatives rose from 31,226 contracts to 35,086, an increase of 3,860 contracts or 12.36%. This uptick in OI is accompanied by a futures volume of 16,798 contracts, reflecting sustained trading interest. The futures value stands at approximately ₹57,516.60 lakhs, while the options segment commands a significantly larger notional value of ₹7,404.95 crores, culminating in a total derivatives market value of ₹58,104.66 lakhs for Mphasis.
Such a surge in open interest typically indicates fresh positions being established rather than existing ones being squared off, suggesting that traders are actively repositioning themselves in anticipation of future price movements. The underlying stock price, currently at ₹2,803, has been under pressure, declining 1.60% on the day and underperforming its sector by 0.82%. Over the past three consecutive sessions, Mphasis has lost 4.56%, signalling a short-term bearish trend.
Price Trends and Moving Averages
Despite the recent weakness, Mphasis remains above its 200-day moving average, a long-term bullish indicator. However, it is trading below its 5-day, 20-day, 50-day, and 100-day moving averages, reflecting short- to medium-term selling pressure. This divergence between long-term support and short-term resistance levels often attracts speculative activity in derivatives, as traders seek to capitalise on potential rebounds or further declines.
Investor participation in the cash segment has notably diminished, with delivery volumes falling by 75.5% compared to the five-day average, registering only 74.99k shares on 26 Dec. This decline in delivery volume suggests that long-term holders may be stepping back, while derivatives traders increase their activity, possibly to hedge or speculate on near-term volatility.
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Market Positioning and Directional Bets
The increase in open interest alongside a decline in the underlying price suggests a complex market positioning scenario. Typically, rising OI with falling prices can indicate that new short positions are being built, reflecting bearish sentiment. However, it can also imply that long positions are being added in anticipation of a reversal, especially if the increase in OI is accompanied by rising volumes in call options or put options.
Given the substantial notional value in options (₹7,404.95 crores), it is plausible that market participants are employing a range of strategies, including protective puts, covered calls, or directional spreads. The liquidity profile of Mphasis supports sizeable trades, with the stock’s average traded value allowing for trade sizes up to ₹2.91 crores based on 2% of the five-day average.
From a technical perspective, the stock’s position above the 200-day moving average provides a critical support level, which may attract buyers at lower levels. Conversely, the short-term moving averages acting as resistance could cap upside momentum, leading to a tug-of-war scenario reflected in the derivatives market.
Mojo Score Upgrade and Market Implications
Adding to the market narrative, Mphasis’s Mojo Score has improved to 72.0, upgrading its Mojo Grade from Hold to Buy as of 23 Dec 2025. This upgrade reflects enhanced fundamentals and positive outlooks from MarketsMOJO’s proprietary analysis, signalling growing confidence among institutional and retail investors alike. Despite the recent price softness, the Buy rating suggests that the stock is favourably positioned for medium- to long-term appreciation.
However, the stock’s market capitalisation grade remains at 2, indicating a mid-cap status with moderate liquidity and volatility characteristics. Investors should weigh these factors carefully when interpreting the derivatives activity and price movements.
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Sector and Benchmark Comparison
In comparison to its sector and benchmark indices, Mphasis has underperformed modestly. The sector declined by 0.80% while the Sensex fell 0.41% on the same day, whereas Mphasis dropped 1.60%. This relative underperformance may be contributing to the increased speculative activity in derivatives as traders seek to capitalise on potential rebounds or hedge against further downside.
The Computers - Software & Consulting sector remains a dynamic space, with technology trends and client demand shaping stock trajectories. Mphasis’s mid-cap status and recent Mojo upgrade position it as a stock to watch, especially given the evolving derivatives market interest.
Investor Takeaways
For investors, the surge in open interest combined with declining prices and reduced delivery volumes suggests a period of heightened uncertainty and repositioning. The upgraded Mojo Grade to Buy provides a positive fundamental backdrop, but the short-term technical indicators and market sentiment warrant caution.
Active traders may find opportunities in the derivatives market to exploit volatility, while long-term investors should monitor key support levels around the 200-day moving average and watch for confirmation of trend reversals. The liquidity profile supports meaningful trade sizes, but the mid-cap nature of Mphasis implies potential for sharper price swings.
Overall, the derivatives activity signals that market participants are actively recalibrating their exposure to Mphasis, reflecting a nuanced view of its near-term prospects amid broader sector and market dynamics.
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