Open Interest and Volume Dynamics
On 19 Feb 2026, Polycab India Ltd’s open interest (OI) in derivatives rose sharply to 46,040 contracts from the previous 38,046, marking an increase of 7,994 contracts or 21.01%. This notable expansion in OI is accompanied by a daily volume of 29,813 contracts, indicating active participation from traders and investors. The futures segment alone accounted for a substantial ₹1,25,652.75 lakhs in value, while options contributed an even larger ₹16,59,97,178.92 lakhs, underscoring the stock’s liquidity and appeal in the derivatives market.
The underlying stock price closed at ₹7,890, just 0.82% shy of its 52-week high of ₹7,948, reinforcing the positive momentum. Polycab has outperformed its sector by 1.94% on the day, while the broader Sensex and sector indices declined by 0.85% and 1.32% respectively. This relative strength highlights the stock’s resilience amid broader market weakness.
Market Positioning and Investor Sentiment
The surge in open interest alongside rising volumes typically signals fresh capital inflows and new positions being established rather than existing ones being squared off. In Polycab’s case, the 21% jump in OI suggests that market participants are increasingly positioning for an upward move. This is corroborated by the stock’s four consecutive days of gains, delivering a cumulative return of 3.89% over this period.
Further supporting this bullish stance is the stock’s trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a strong uptrend across multiple timeframes. The delivery volume on 18 Feb surged to 1.05 lakh shares, a 45.23% increase over the five-day average, signalling rising investor conviction and participation in the cash market as well.
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Implications of Derivative Activity on Directional Bets
The pronounced increase in open interest, especially in the futures segment, often reflects directional bets by institutional and retail traders. Given Polycab’s current valuation and technical strength, it is plausible that market participants are anticipating further upside, possibly driven by robust earnings outlooks, sector tailwinds, or favourable macroeconomic factors.
Options market data, with an enormous notional value exceeding ₹16,59,97,178.92 lakhs, also suggests active hedging and speculative activity. The interplay between call and put open interest levels can provide clues on market bias; however, the overall rise in total open interest to ₹1,26,968.80 lakhs confirms heightened engagement and confidence in the stock’s near-term prospects.
Fundamental and Technical Backdrop
Polycab India Ltd, a large-cap player in the electrical cables industry with a market capitalisation of ₹1,18,791.02 crores, has recently been upgraded by MarketsMOJO from a Hold to a Buy rating, reflecting improved fundamentals and growth prospects. The company’s Mojo Score stands at a healthy 71.0, indicating strong financial health and operational performance.
The stock’s ability to sustain above critical moving averages and maintain a rising delivery volume trend points to genuine investor interest rather than speculative froth. This combination of technical strength and fundamental upgrades provides a solid foundation for the observed surge in derivatives open interest.
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Comparative Performance and Liquidity Considerations
Polycab’s outperformance relative to its sector and the broader Sensex index is notable in a market environment where many stocks are under pressure. The stock’s 0.77% gain on the day contrasts with sector losses of 1.32% and Sensex declines of 0.85%, underscoring its defensive qualities and investor preference.
Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹2.15 crores based on 2% of the five-day average traded value. This ensures that institutional investors can enter or exit positions without significant price impact, further encouraging participation in both cash and derivatives markets.
Outlook and Investor Takeaways
The surge in open interest and volume, combined with positive price action and fundamental upgrades, suggests that Polycab India Ltd is attracting renewed investor confidence. Market participants appear to be positioning for continued gains, supported by strong sectoral demand and the company’s leadership in the cables electricals space.
Investors should monitor the evolution of open interest in both futures and options segments to gauge the sustainability of this trend. Additionally, tracking delivery volumes and price action relative to moving averages will provide further confirmation of the stock’s directional bias.
While the current momentum is encouraging, prudent investors should remain mindful of broader market volatility and sector-specific risks, including raw material price fluctuations and regulatory developments that could impact margins.
In summary, Polycab India Ltd’s recent derivatives market activity signals a strong bullish sentiment, supported by solid fundamentals and technical strength. This makes it a compelling candidate for investors seeking exposure to the electrical cables sector with a favourable risk-reward profile.
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