NMDC Ltd Sees Sharp Surge in Open Interest Amid Mixed Market Signals

Open Interest and Volume Dynamics

The latest data shows NMDC’s open interest (OI) rising sharply from 80,820 contracts to 99,573, an increase of 18,753 contracts or 23.2%. This surge in OI is accompanied by a futures volume of 55,414 contracts, reflecting robust trading activity. The futures value stands at ₹2,22,773.63 lakhs, while the options market commands a staggering ₹7,956.49 crores in notional value, underscoring the stock’s prominence in the derivatives space.

Such a pronounced increase in OI typically indicates fresh positions being established rather than existing ones being squared off. This suggests that traders are actively repositioning themselves, possibly in anticipation of upcoming catalysts or volatility in NMDC’s underlying shares, which currently trade at ₹80.

Price and Moving Average Context

NMDC’s price action on the day was mixed. The stock marginally underperformed its own one-day return at -0.25%, yet outperformed the Minerals & Mining sector’s decline of -0.40% and significantly outpaced the broader Sensex’s fall of -1.12%. Technically, the stock remains above its 100-day and 200-day moving averages, signalling a longer-term bullish bias. However, it trades below its shorter-term 5-day, 20-day, and 50-day moving averages, indicating near-term consolidation or pressure.

This technical setup, combined with the surge in open interest, points to a market grappling with uncertainty but positioning for a potential directional move. The divergence between short- and long-term moving averages often attracts speculative interest, as traders seek to capitalise on anticipated volatility.

Investor Participation and Delivery Volumes

Interestingly, delivery volumes have fallen sharply, with the delivery volume on 18 Feb 2026 at 57.1 lakh shares, down 53.31% against the five-day average. This decline in investor participation at the delivery level contrasts with the rising derivatives activity, suggesting that while long-term holders may be stepping back, traders and speculators are increasingly active in the futures and options markets.

The stock’s liquidity remains adequate, with a trade size capacity of ₹3.61 crore based on 2% of the five-day average traded value. This ensures that the derivatives market can absorb sizeable positions without undue price impact, facilitating the observed surge in open interest.

Market Positioning and Directional Bets

The surge in open interest, coupled with the substantial notional value in options, indicates that market participants are actively positioning for directional moves in NMDC. The stock’s Mojo Score of 75.0 and a current Mojo Grade of Buy (downgraded from Strong Buy on 13 Feb 2026) reflect a cautiously optimistic outlook from the MarketsMOJO research team.

Given the high dividend yield of 7.24%, NMDC remains attractive to income-focused investors, but the recent downgrade suggests some concerns over near-term momentum or valuation pressures. The derivatives market activity may be reflecting this nuanced sentiment, with traders hedging or speculating on volatility rather than a clear bullish or bearish consensus.

Open interest increases in both call and put options, as implied by the large options notional value, suggest a mix of strategies. Some traders may be buying calls anticipating a rebound, while others could be purchasing puts or writing options to hedge against downside risks. This balanced positioning often precedes a significant price move, as the market awaits fresh triggers.

Sector and Market Context

NMDC’s performance relative to its sector and the broader market is noteworthy. While the Minerals & Mining sector declined by 0.40% and the Sensex by 1.12% on the day, NMDC’s smaller loss of 0.25% and outperformance by 0.25% against its sector peers highlight its relative resilience. This may be attracting speculative interest in derivatives as traders seek to capitalise on potential sector rotation or commodity price movements.

As a mid-cap stock with a market capitalisation of ₹70,237.83 crore, NMDC occupies a strategic position in the minerals and mining space. Its liquidity and active derivatives market make it a preferred vehicle for institutional and retail traders alike to express views on the sector’s outlook.

Implications for Investors and Traders

The current derivatives activity in NMDC suggests that investors should closely monitor open interest trends and volume patterns for clues on future price direction. The elevated OI and mixed moving average signals imply that the stock could experience increased volatility in the near term, presenting both opportunities and risks.

Long-term investors may find comfort in the stock’s strong dividend yield and its position above key long-term moving averages, while traders might capitalise on short-term swings driven by derivatives positioning. However, the recent downgrade in Mojo Grade from Strong Buy to Buy signals a need for caution and thorough analysis before committing fresh capital.

Overall, NMDC’s derivatives market activity reflects a dynamic environment where market participants are actively recalibrating their strategies amid evolving sector fundamentals and broader market conditions.

Conclusion

NMDC Ltd’s sharp increase in open interest and sustained volume in the derivatives segment highlight a significant shift in market positioning. While the stock’s price showed a slight decline, the underlying activity suggests that traders are preparing for potential directional moves, balancing bullish and bearish bets. Investors should weigh the stock’s strong dividend yield and mid-cap status against the recent technical signals and market sentiment to make informed decisions.

As the Minerals & Mining sector continues to navigate commodity price fluctuations and macroeconomic factors, NMDC’s derivatives market will remain a key barometer of investor expectations and risk appetite.

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