Prestige Estates Sees Sharp Open Interest Surge Amid Bearish Momentum

Open Interest and Volume Dynamics

On 23 January 2026, Prestige Estates Projects Ltd (symbol: PRESTIGE) recorded an open interest (OI) of 21,449 contracts, up from 18,450 the previous day, marking an increase of 2,999 contracts or 16.25%. This rise in OI was accompanied by a volume of 16,823 contracts, indicating robust trading activity in the derivatives market. The futures segment alone accounted for a value of approximately ₹52,853.57 lakhs, while the options segment exhibited an enormous notional value of ₹5,499.20 crores, culminating in a total derivatives value of ₹53,272.59 lakhs.

The underlying stock price stood at ₹1,375, having experienced a decline of 3.09% on the day. Notably, the stock has been on a consecutive two-day losing streak, falling by 4.2% over this period. The intraday low touched ₹1,373.2, with the weighted average price skewed towards the lower end of the day’s range, suggesting selling pressure near the lows.

Market Positioning and Directional Bets

The increase in open interest amid falling prices typically indicates that fresh short positions are being established, or existing shorts are being added to, reflecting bearish sentiment among derivatives traders. This is corroborated by the fact that Prestige Estates is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a sustained downtrend.

Moreover, the construction and real estate sector, in which Prestige operates, has declined by 2.6% on the same day, underlining sector-wide weakness. The stock’s delivery volume on 22 January was 1.89 lakh shares, but this figure represents a sharp 70.2% drop compared to the five-day average delivery volume, indicating waning investor participation in the cash market. This divergence between derivatives activity and cash market participation often points to speculative positioning rather than genuine accumulation or distribution by long-term investors.

Technical and Fundamental Context

Prestige Estates Projects Ltd is classified as a mid-cap company with a market capitalisation of ₹59,561.38 crores. Despite its sizeable market cap, the company’s Mojo Score has deteriorated to 27.0, with a recent downgrade from a 'Sell' to a 'Strong Sell' rating on 12 January 2026. The market cap grade remains low at 2, reflecting concerns over the company’s valuation and growth prospects.

The stock’s 1-day return of -2.80% slightly underperformed the sector’s decline of -2.65% and was notably weaker than the broader Sensex’s fall of -0.77%. This relative underperformance, combined with the surge in open interest, suggests that traders are positioning for further downside or increased volatility in the near term.

Implications for Investors and Traders

The sharp rise in open interest alongside declining prices and subdued delivery volumes suggests that market participants are increasingly bearish on Prestige Estates. The derivatives market appears to be dominated by short sellers or traders hedging existing long positions, anticipating further price erosion. This is consistent with the company’s deteriorating fundamental outlook as reflected in its Mojo Grade downgrade to Strong Sell.

Investors should note that the stock’s liquidity remains adequate, with trading volumes sufficient to support sizeable trades up to ₹3.33 crores based on 2% of the five-day average traded value. However, the falling investor participation in the cash segment signals caution, as retail and institutional investors may be stepping back amid uncertainty.

Sectoral and Broader Market Context

The realty sector continues to face headwinds, with construction and real estate stocks broadly under pressure. Factors such as rising interest rates, regulatory challenges, and subdued demand have weighed on sentiment. Prestige Estates, despite its mid-cap stature and sizeable market cap, is not insulated from these macroeconomic pressures.

Technical indicators reinforce the bearish outlook. Trading below all major moving averages indicates a lack of short-term and long-term momentum. The weighted average price skewed near the day’s low further confirms selling dominance. These signals, combined with the surge in open interest, suggest that traders are positioning for continued weakness or volatility in the near term.

Outlook and Strategic Considerations

Given the current market positioning and technical backdrop, Prestige Estates Projects Ltd appears vulnerable to further downside pressure. The strong increase in open interest amid falling prices is a classic sign of bearish conviction in the derivatives market. Investors should be wary of potential volatility spikes and consider the company’s deteriorating fundamental scores before initiating fresh long positions.

For traders, the derivatives market offers opportunities to capitalise on the prevailing bearish sentiment through short positions or protective strategies. However, the relatively high notional values in options suggest that hedging activity is also significant, which could lead to sharp price swings around key strike prices.

In summary, the combination of a 16.25% surge in open interest, declining stock price, and falling delivery volumes paints a cautious picture for Prestige Estates. The company’s downgrade to a Strong Sell rating by MarketsMOJO further reinforces the need for prudence in exposure to this mid-cap realty stock.

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