Punjab National Bank Sees Significant Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 29 Dec 2025, PNB's open interest (OI) in derivatives rose sharply to 67,313 contracts from 59,263 the previous day, marking an increase of 8,050 contracts or 13.58%. This expansion in OI is accompanied by a substantial volume of 60,533 contracts traded, indicating robust participation in the futures and options market. The futures segment alone accounted for a value of approximately ₹1,87,556 lakhs, while the options segment's notional value stood at an extraordinary ₹39,664.57 crores, underscoring the scale of derivatives activity linked to PNB.

Such a pronounced rise in open interest often suggests that new positions are being established rather than closed out, which can be a precursor to significant price movements. However, the directional bias of these positions requires further scrutiny given the stock's recent price behaviour.

Price Performance and Technical Context

PNB's underlying share price closed at ₹119, marginally down by 0.22% on the day, underperforming its public sector banking peers which gained 0.11%, and the broader Sensex which declined 0.41%. The stock has been on a two-day losing streak, cumulatively falling by 0.65%, reflecting some short-term weakness.

Technically, PNB's price remains above its 100-day and 200-day moving averages, signalling a longer-term uptrend. However, it trades below its 5-day, 20-day, and 50-day moving averages, indicating near-term selling pressure and a potential consolidation phase. This mixed technical picture suggests that while the stock retains structural support, short-term momentum is subdued.

Investor Participation and Liquidity Considerations

Investor participation appears to be waning, with delivery volumes on 26 Dec falling by 41% to 43.23 lakh shares compared to the five-day average. This decline in delivery volume points to reduced conviction among long-term holders, possibly reflecting caution amid recent volatility.

Despite this, liquidity remains adequate for sizeable trades, with the stock's average traded value supporting transaction sizes up to ₹3.19 crore based on 2% of the five-day average traded value. This liquidity profile ensures that institutional investors can enter or exit positions without significant market impact.

Market Positioning and Potential Directional Bets

The surge in open interest alongside high volumes suggests that market participants are actively repositioning in PNB derivatives. Given the stock's recent underperformance and technical signals, it is plausible that traders are establishing both bullish and bearish bets, reflecting uncertainty about near-term direction.

Options data, with an enormous notional value exceeding ₹39,664 crores, indicates significant hedging and speculative activity. The elevated open interest could be driven by call option writing or put option buying, strategies often employed to capitalise on expected volatility or directional moves. However, without a clear breakout above short-term moving averages, the market appears cautious.

Mojo Score and Analyst Ratings

Punjab National Bank currently holds a Mojo Score of 58.0, categorised as a 'Hold' rating. This represents an upgrade from a previous 'Sell' grade assigned on 11 Sep 2025, signalling improving fundamentals or technical outlook. Despite this upgrade, the stock's market cap grade remains at 1, reflecting its status as a large-cap entity with substantial market presence but limited recent momentum.

Analysts note that while PNB's long-term prospects remain intact, short-term headwinds and sectoral challenges warrant a cautious stance. The bank's performance relative to its public sector banking peers and the broader market will be critical in determining whether the recent open interest surge translates into sustained price appreciation.

Sector and Broader Market Context

Within the public sector banking industry, PNB's recent price action and derivatives activity stand out due to the scale of open interest growth. The sector has experienced mixed returns, with some banks outperforming on the back of improving asset quality and credit growth, while others face pressure from macroeconomic uncertainties and regulatory developments.

Investors should monitor how PNB navigates these sectoral dynamics, especially given its large market capitalisation of ₹1,38,030.25 crore. The bank's ability to leverage its scale while managing risks will influence investor confidence and derivatives market positioning going forward.

Outlook and Investor Takeaways

In summary, the sharp increase in open interest for Punjab National Bank's derivatives signals heightened market interest and evolving positioning. While this could presage a significant directional move, the current technical and volume indicators suggest a cautious environment with mixed signals.

Investors should closely monitor price action relative to key moving averages and watch for changes in delivery volumes as a gauge of genuine investor conviction. The upgraded Mojo Grade to 'Hold' reflects a balanced view, acknowledging both the bank's underlying strengths and near-term uncertainties.

Given the liquidity profile and active derivatives market, PNB remains a stock of interest for traders seeking to capitalise on volatility, but a clear directional trend has yet to emerge. Prudent investors may consider waiting for confirmation of trend reversal or continuation before increasing exposure.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →