Open Interest and Volume Dynamics
The latest data reveals that Supreme Industries Ltd’s open interest (OI) in derivatives climbed from 13,804 contracts to 15,819, an increase of 2,015 contracts or 14.6%. This rise in OI was accompanied by a futures volume of 8,622 contracts, reflecting heightened trading activity. The futures value stood at approximately ₹14,631 lakhs, while the options segment exhibited an enormous notional value of ₹4,096 crores, underscoring significant interest in the stock’s derivatives.
Such a surge in OI typically indicates fresh positions being established rather than existing ones being squared off. Market participants appear to be actively repositioning, possibly in anticipation of near-term price movements or volatility. However, the underlying stock’s price action presents a more nuanced picture.
Price Performance and Market Context
On 3 February 2026, Supreme Industries Ltd closed with a gain of 1.13%, touching an intraday high of ₹3,719.8, up 3.3% from the previous close. Despite this, the stock underperformed its sector, which gained 2.52%, and lagged behind the Sensex’s 2.79% advance. Over the past two trading sessions, the stock has delivered a cumulative return of 4.77%, signalling some positive momentum.
Technically, the stock is trading above its 5-day, 20-day, and 50-day moving averages, suggesting short- to medium-term strength. However, it remains below its 100-day and 200-day moving averages, indicating that longer-term trends have yet to confirm a sustained uptrend. This mixed technical picture may be contributing to the cautious stance among investors.
Investor Participation and Liquidity Considerations
Interestingly, delivery volumes have fallen sharply, with the 82,590 shares delivered on 2 February representing a 59.58% decline against the five-day average. This drop in investor participation could imply that while derivatives activity is rising, actual shareholding changes are more subdued. The stock’s liquidity remains adequate, with a tradable size of ₹1.73 crore based on 2% of the five-day average traded value, allowing institutional and retail investors to execute sizeable trades without significant market impact.
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Market Positioning and Directional Bets
The increase in open interest alongside rising volumes suggests that traders are actively taking new positions in Supreme Industries Ltd derivatives. Given the stock’s recent gains but relative underperformance versus the sector and benchmark indices, it is plausible that market participants are hedging or speculating on volatility rather than a clear directional move.
Options data, with a notional value exceeding ₹4,096 crores, indicates substantial interest in both calls and puts, which may reflect a range-bound outlook or preparation for a significant event. The underlying value of the stock stands at ₹3,659, and the futures value of ₹14,631 lakhs further confirms active participation in the derivatives market.
From a fundamental perspective, Supreme Industries Ltd operates in the plastic products industrial sector, a mid-cap segment with a market capitalisation of ₹46,297 crore. The company’s Mojo Score currently stands at 34.0, with a Mojo Grade of Sell, downgraded from Hold on 23 October 2025. This downgrade signals deteriorating fundamentals or valuation concerns, which may be influencing cautious positioning among investors.
Additionally, the company’s Market Cap Grade is 2, reflecting mid-cap status with moderate liquidity and institutional interest. The combination of a Sell rating and rising derivatives activity could imply that traders are positioning for downside risk or volatility rather than sustained upside.
Sector and Broader Market Comparison
The plastic products sector has gained 2.52% on the day, outperforming Supreme Industries Ltd’s 1.13% gain. The Sensex’s 2.79% rise further highlights the stock’s relative underperformance. This divergence may be due to sector rotation or stock-specific factors such as earnings outlook, raw material costs, or competitive pressures.
Given the stock’s technical positioning—above short-term moving averages but below longer-term ones—investors may be awaiting clearer signals before committing to larger positions. The falling delivery volumes also suggest that long-term holders are not aggressively accumulating shares at current levels.
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Implications for Investors
For investors and traders, the surge in open interest in Supreme Industries Ltd’s derivatives signals increased market attention and potential volatility ahead. However, the mixed signals from price performance, technical indicators, and fundamental ratings counsel caution.
Those considering fresh exposure should weigh the company’s recent downgrade to a Sell rating and the relative underperformance against sector and benchmark indices. The falling delivery volumes suggest limited conviction among long-term investors, while the elevated options activity points to hedging or speculative strategies rather than directional certainty.
In this environment, a prudent approach may involve monitoring key technical levels, tracking changes in open interest and volume patterns, and staying alert to sector developments and macroeconomic factors impacting the plastic products industry.
Overall, while the derivatives market activity in Supreme Industries Ltd is robust, it reflects a complex interplay of positioning rather than a straightforward bullish or bearish consensus.
Outlook and Conclusion
Supreme Industries Ltd’s recent open interest surge highlights the stock’s prominence in the derivatives market and the active repositioning by traders. Despite short-term gains, the stock’s fundamental and technical indicators remain mixed, with a recent downgrade to Sell and underperformance relative to peers.
Investors should remain vigilant and consider alternative opportunities within the plastic products industrial sector, especially given the availability of higher-rated stocks with stronger fundamentals and clearer trends.
Continued monitoring of open interest, volume, and price action will be essential to gauge the evolving market sentiment and to identify potential entry or exit points in this mid-cap stock.
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