Open Interest and Volume Dynamics
The recent spike in Polycab’s open interest is accompanied by robust trading volumes, with the latest volume tallying 45,141 contracts. This volume closely aligns with the OI increase, suggesting fresh positions are being established rather than existing ones being squared off. The futures segment alone accounts for a substantial ₹1,59,770 lakhs in value, while options contribute an overwhelming ₹28,278.68 crores, culminating in a total derivatives value of approximately ₹1,62,005 lakhs. Such figures underscore the stock’s liquidity and attractiveness among derivatives traders.
Notably, Polycab’s underlying spot price closed at ₹7,925, just 0.79% shy of its 52-week high of ₹7,948, indicating that the derivatives activity is closely tracking the underlying’s bullish momentum. The stock has outperformed the broader Sensex, which gained 0.62% on the day, although it slightly underperformed its sector benchmark, which rose 1.70%. Polycab’s 1-day return stood at 1.57%, reflecting steady investor confidence.
Market Positioning and Investor Sentiment
The surge in open interest, coupled with rising delivery volumes, points to a growing conviction among market participants. Delivery volume on 19 Feb surged to 1.34 lakh shares, a 66.7% increase over the 5-day average, signalling that investors are not merely trading but accumulating shares for the longer term. This rising investor participation is further supported by the stock trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — a technical indicator of sustained upward momentum.
Polycab’s market capitalisation stands at a commanding ₹1,18,934 crore, categorising it as a large-cap stock with strong institutional interest. The company’s mojo score of 78.0 and an upgraded mojo grade from Hold to Buy on 21 Jul 2025 reflect improved fundamentals and positive analyst sentiment. The market cap grade of 1 further confirms its stature as a blue-chip stock within the cables and electricals sector.
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Directional Bets and Derivatives Positioning
The 15.6% increase in open interest suggests that traders are taking fresh positions, likely anticipating further upside in Polycab’s share price. The derivatives market activity, especially in futures and options, often serves as a barometer for institutional and retail sentiment. The substantial option value of over ₹28,000 crore indicates active hedging and speculative strategies, with market participants positioning for volatility and directional moves.
Given the stock’s proximity to its 52-week high and strong technical indicators, it is plausible that the majority of new open interest is skewed towards bullish strategies such as long futures or call options. However, the slight underperformance relative to the sector on the day may also imply some profit booking or cautious positioning by traders.
Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹2.51 crore comfortably, ensuring that large institutional trades can be executed without significant price impact. This liquidity is crucial for sustaining the elevated open interest levels and facilitating smooth price discovery.
Fundamental and Technical Outlook
Polycab India Ltd’s upgrade from Hold to Buy by MarketsMOJO on 21 Jul 2025 reflects a positive reassessment of its financial health and growth prospects. The company’s mojo score of 78.0 is indicative of strong fundamentals, including revenue growth, profitability, and return ratios. The stock’s consistent trading above all major moving averages further reinforces its bullish technical stance.
Investors should note that while the open interest surge signals optimism, it also warrants close monitoring of volume patterns and price action to confirm sustained momentum. The cables and electricals sector remains competitive, and external factors such as raw material costs and regulatory changes could influence near-term performance.
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Conclusion: Strategic Implications for Investors
The pronounced increase in open interest and volume in Polycab India Ltd’s derivatives market highlights a growing bullish sentiment among traders and investors. Supported by strong fundamentals, technical momentum, and improved analyst ratings, the stock appears well-positioned for further gains in the near term. However, investors should remain vigilant to sector dynamics and broader market conditions that could impact performance.
For those considering exposure, the current liquidity and active derivatives market provide ample opportunities for both directional bets and hedging strategies. Polycab’s status as a large-cap leader in the cables and electricals sector, combined with its upgraded mojo grade and solid market cap, make it a compelling candidate for inclusion in diversified portfolios focused on quality growth stocks.
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