Power Grid Corporation Sees Sharp Open Interest Surge Amid Positive Price Momentum

Open Interest and Volume Dynamics

On 20 Feb 2026, POWERGRID’s open interest rose sharply by 11.53%, climbing from 98,692 contracts to 110,068 contracts. This increase of 11,376 contracts is significant in the context of the stock’s derivatives market, indicating fresh positions being established rather than existing ones being squared off. The volume for the day stood at 74,875 contracts, reflecting robust trading activity that supports the OI expansion.

The futures segment contributed a substantial ₹1,70,588.71 lakhs in value, while the options segment dwarfed this with an enormous ₹25,535.43 crores, culminating in a total derivatives value of approximately ₹1,72,666.85 lakhs. Such high notional values underline the intense interest among traders and institutional players in POWERGRID’s price trajectory.

Price Performance and Technical Context

POWERGRID’s underlying price closed at ₹299, having touched an intraday high of ₹302.05, marking a 2.51% gain on the day. This rebound follows two consecutive days of declines, signalling a potential trend reversal. The stock is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – which collectively suggest a bullish technical setup.

Relative to its sector, POWERGRID’s 1-day return of 1.48% slightly outperformed the Power sector’s 1.42% gain and significantly surpassed the Sensex’s 0.62% rise, highlighting its relative strength within the broader market.

Investor Participation and Liquidity Considerations

Despite the positive price action, delivery volumes have declined sharply. On 19 Feb, delivery volume was 43.95 lakh shares, down 46.54% against the 5-day average delivery volume. This drop in investor participation at the delivery level may indicate that short-term traders and derivatives players are driving the recent momentum rather than long-term holders.

Liquidity remains adequate, with the stock’s 5-day average traded value supporting trade sizes up to ₹7.71 crores comfortably. This ensures that institutional investors can enter or exit positions without significant market impact, a crucial factor given the large open interest build-up.

Market Positioning and Directional Bets

The surge in open interest alongside rising prices and volumes suggests that market participants are positioning for an upward move in POWERGRID. The increase in OI typically reflects fresh long positions or short sellers adding to their bets, but given the price appreciation and technical strength, the dominant interpretation is a build-up of bullish bets.

Options data further corroborates this view, with the options market showing a substantial notional value, indicating active hedging and speculative activity. The high dividend yield of 3.02% at the current price adds an attractive income component, potentially supporting investor confidence in the stock’s medium-term outlook.

Mojo Score and Analyst Ratings

Despite the positive technical signals, POWERGRID’s MarketsMOJO score remains subdued at 35.0, with a Mojo Grade of Sell. This represents an upgrade from a previous Strong Sell rating as of 31 Dec 2024, reflecting some improvement in fundamentals or market sentiment. The market cap grade is 1, indicating a large-cap status with stable institutional interest but limited upside from a fundamental perspective.

Investors should weigh the technical momentum against the cautious fundamental outlook, as the stock’s valuation and sector dynamics may temper gains despite the recent surge in derivatives activity.

Sector and Market Context

The power sector has shown resilience recently, with the sector index rising 1.42% on the day. POWERGRID’s performance in line with this trend suggests it remains a key beneficiary of sectoral tailwinds, including government infrastructure spending and regulatory support for transmission assets.

However, the broader market environment remains volatile, and investors should monitor open interest trends closely as a barometer of market conviction. A sustained increase in OI accompanied by rising prices often precedes strong directional moves, but sudden reversals can occur if positioning becomes overcrowded.

Investor Takeaways and Outlook

For investors tracking POWERGRID, the recent open interest surge in derivatives is a clear signal of heightened market interest and potential directional conviction. The stock’s technical indicators are supportive, with price action breaking short-term resistance and trading above all major moving averages.

However, the decline in delivery volumes suggests caution, as it may indicate that long-term investor participation is not yet fully aligned with the derivatives market enthusiasm. The current Mojo Grade of Sell advises prudence, especially for risk-averse investors.

Given the stock’s large-cap status and stable dividend yield, it remains a core holding for income-focused portfolios, but traders may find opportunities to capitalise on short-term momentum driven by derivatives positioning. Monitoring open interest trends, volume patterns, and price action will be critical to gauge the sustainability of the current rally.

In summary, POWERGRID’s derivatives market activity points to a growing bullish sentiment, but investors should balance this with fundamental considerations and sector outlook before making significant portfolio adjustments.

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