Open Interest and Volume Dynamics
On 23 January 2026, Polycab India Ltd’s open interest (OI) in derivatives rose sharply to 68,619 contracts from the previous 60,388, marking an increase of 8,231 contracts or 13.63%. This expansion in OI was accompanied by a total volume of 78,149 contracts, indicating robust trading activity. The futures value stood at approximately ₹1,77,956 lakhs, while the options segment exhibited a substantial notional value of ₹50,614.68 crores, underscoring the significant interest in the stock’s derivatives.
The combined futures and options turnover amounted to ₹1,81,930 lakhs, reflecting active participation from traders and investors. Despite this, the underlying stock price declined to ₹6,726, touching an intraday low of ₹6,708, down 4.16% on the day. The weighted average price of traded contracts clustered near the day’s low, suggesting selling pressure dominated the session.
Price Performance and Technical Indicators
Polycab India’s share price underperformed its sector by 2.11% and the broader Sensex by 2.66% on the day, registering a 1-day return of -3.41% against the sector’s -1.63% and Sensex’s -0.75%. The stock is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical setup. This downward momentum is further corroborated by a sharp decline in delivery volumes, which fell by 69.37% to 2.03 lakh shares on 22 January compared to the 5-day average, indicating waning investor participation in the cash segment.
Market Positioning and Potential Directional Bets
The surge in open interest amid falling prices and subdued delivery volumes suggests that market participants are actively repositioning in the derivatives market, possibly anticipating further downside or hedging existing exposures. The increase in OI alongside rising volumes typically indicates fresh positions being built rather than unwinding, which in a falling price environment often points to bearish bets.
However, the sizeable notional value in options contracts hints at complex strategies, including protective puts or spread trades, which could be employed to manage risk or speculate on volatility. The elevated futures turnover also reflects increased short-term trading interest, possibly driven by technical traders responding to the stock’s breach of key support levels.
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Fundamental and Market Context
Polycab India Ltd operates in the Cables - Electricals industry and is classified as a mid-cap company with a market capitalisation of ₹1,01,777.38 crores. The company’s Mojo Score currently stands at 72.0, reflecting a positive outlook, and it has recently been upgraded from a Hold to a Buy rating as of 21 July 2025. Despite this favourable fundamental grading, the recent price weakness and technical deterioration highlight short-term challenges.
The stock’s liquidity remains adequate, with the ability to support trade sizes up to ₹11.29 crores based on 2% of the 5-day average traded value. This liquidity ensures that institutional and retail investors can execute sizeable trades without significant market impact, which may partly explain the active derivatives positioning.
Implications for Investors and Traders
The divergence between the improving fundamental rating and the bearish technical signals suggests a nuanced investment landscape. Long-term investors may view the recent price weakness as a potential entry opportunity, given the company’s strong fundamentals and positive Mojo Grade. Conversely, short-term traders and derivatives players appear to be positioning for continued volatility or downside, as evidenced by the open interest surge and price action.
Investors should closely monitor upcoming earnings announcements, sectoral developments, and broader market trends that could influence Polycab India’s trajectory. The cables and electricals sector remains sensitive to infrastructure spending and industrial demand, factors that could drive future price momentum.
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Outlook and Strategic Considerations
Given the current market positioning, investors should be cautious of potential short-term volatility in Polycab India Ltd’s stock price. The rising open interest in derivatives amid falling prices often precedes further directional moves, either as a continuation of the downtrend or a short squeeze if sentiment shifts.
Traders may consider monitoring the put-call ratio and strike-wise open interest data for additional clues on market sentiment and potential support or resistance zones. Meanwhile, long-term investors should weigh the company’s fundamental strengths against the prevailing technical weakness to time their entries judiciously.
Overall, the derivatives market activity signals a heightened focus on Polycab India Ltd, making it a stock to watch closely in the coming sessions for clearer directional cues.
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