Polycab India Ltd Sees Sharp Open Interest Surge Signalling Strong Market Positioning

Open Interest and Volume Dynamics

On 23 Feb 2026, Polycab’s open interest in derivatives rose sharply by 6,602 contracts, a 17.7% increase from the previous OI of 37,290 to 43,892. This notable expansion in OI was accompanied by a futures volume of 50,209 contracts, underscoring active trading interest. The futures market value stood at ₹1,43,221.19 lakhs, while the options segment exhibited an enormous notional value of ₹35,568.91 crores, cumulatively amounting to ₹1,46,788.21 lakhs in total derivatives value.

The underlying stock price also demonstrated strength, closing at ₹7,979, outperforming its sector by 1.2% and the Sensex by 1.1% on the day. Polycab has been on a two-day consecutive gain streak, delivering a 2.6% return over this period, signalling sustained bullish momentum.

Market Positioning and Investor Sentiment

The surge in open interest alongside rising volumes typically indicates fresh capital entering the market, often reflecting new directional bets rather than mere position rollovers. In Polycab’s case, the 17.7% OI increase suggests that traders are building positions, likely anticipating further upside given the stock’s recent breakout to all-time highs.

Supporting this bullish stance, Polycab is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which is a technical confirmation of an uptrend. Additionally, delivery volumes on 20 Feb surged to 4.81 lakh shares, a remarkable 450.1% increase compared to the five-day average, indicating strong investor participation and conviction in the stock’s prospects.

Liquidity and Market Capitalisation Context

Polycab India Ltd is a large-cap stock with a market capitalisation of ₹1,20,018 crores, classified under the Cables - Electricals sector. The stock’s liquidity profile is robust, with a five-day average traded value sufficient to support trade sizes up to ₹4.07 crores without significant market impact. This liquidity ensures that institutional investors can enter or exit positions efficiently, which is crucial during periods of heightened derivatives activity.

Implications of Derivatives Activity on Price Direction

The marked increase in open interest, coupled with rising prices and volumes, often signals that market participants are positioning for a sustained upward move. The derivatives market, especially futures and options, allows traders to leverage their views, and the current data suggests a predominance of bullish bets on Polycab.

Given the stock’s recent breakout to ₹8,005, the highest level ever recorded, the derivatives activity may be reflecting expectations of continued momentum driven by strong fundamentals and sectoral tailwinds. The Mojo Score of 78.0 and an upgraded Mojo Grade from Hold to Buy on 21 Jul 2025 further reinforce the positive outlook, indicating improved financial metrics and quality assessments.

Sector and Benchmark Comparison

Polycab’s outperformance relative to its sector and the broader Sensex index highlights its leadership within the Cables - Electricals space. While the sector recorded a modest 0.16% gain on the day, Polycab surged 1.31%, demonstrating relative strength. This divergence often attracts additional investor interest, as market participants seek stocks with superior momentum and fundamentals.

Moreover, the stock’s consistent trading above all major moving averages suggests a well-established uptrend, reducing the risk of abrupt reversals and providing technical support for further gains.

Outlook and Investor Considerations

Investors should note that the surge in open interest and volume is a double-edged sword. While it often confirms bullish sentiment, it can also precede increased volatility as positions are adjusted or unwound. However, Polycab’s strong fundamentals, large-cap status, and positive technical indicators provide a solid foundation for sustained gains.

Given the stock’s liquidity and market cap grade of 1, institutional investors can confidently build positions without undue price impact. The recent upgrade to a Buy rating by MarketsMOJO, supported by a high Mojo Score, further validates the stock’s investment appeal.

Market participants should monitor open interest trends closely, alongside price action and volume, to gauge the strength of the current move. A continued rise in OI with price appreciation would confirm fresh buying interest, while a divergence could signal profit-taking or position squaring.

Summary

Polycab India Ltd’s derivatives market activity reveals a clear shift towards bullish positioning, supported by a 17.7% jump in open interest and strong volume metrics. The stock’s breakout to an all-time high of ₹8,005, coupled with robust delivery volumes and technical strength, underscores positive investor sentiment. With a large market cap and ample liquidity, Polycab remains a key stock to watch in the Cables - Electricals sector as it continues to attract fresh capital and directional bets.

Investors seeking exposure to quality large caps with strong fundamentals and technical momentum may find Polycab an attractive proposition, especially given its recent upgrade to a Buy rating and high Mojo Score of 78.0.

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