Open Interest and Volume Dynamics
The latest data reveals that Swiggy's open interest (OI) in derivatives rose sharply from 8,975 contracts to 10,894 contracts, an increase of 1,919 contracts or 21.38% on the most recent trading day. This notable expansion in OI was accompanied by a futures volume of 4,951 contracts, indicating robust participation in the derivatives market. The combined futures and options value stood at approximately ₹1,07,45.39 lakhs, with futures contributing ₹10,480.45 lakhs and options dominating at ₹14,57,25.41 lakhs, underscoring the significant liquidity and interest in Swiggy's derivatives.
Price Action and Market Positioning
Despite the surge in derivatives activity, Swiggy's underlying equity price has been under pressure. The stock closed at ₹377, down 1.85% on the day, and has declined by 3.25% over the past two consecutive sessions. Intraday lows touched ₹377, with the weighted average price skewed towards the lower end of the day's range, suggesting selling pressure. The stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained bearish trend.
Investor participation remains elevated, with delivery volumes on 2 January reaching 29.13 lakh shares, marginally up by 0.16% compared to the five-day average. Liquidity metrics indicate that Swiggy is sufficiently liquid to support trade sizes of up to ₹5.3 crore based on 2% of the five-day average traded value, facilitating active trading and positioning adjustments.
Interpreting the Open Interest Surge
The sharp rise in open interest alongside falling prices typically points to fresh short positions being initiated or existing shorts being added to, reflecting bearish market sentiment. This is consistent with Swiggy's recent downgrade in its Mojo Grade from Sell to Strong Sell on 4 December 2025, with a current Mojo Score of 23.0, indicating weak fundamentals and deteriorating outlook. The market cap grade remains low at 2, reinforcing the mid-cap stock's vulnerability amid sector headwinds.
Such an increase in OI, coupled with declining prices and volume concentration near lows, suggests that traders are positioning for further downside or hedging existing long exposures. The derivatives market activity may also reflect speculative directional bets, with participants anticipating continued weakness in the e-retail and e-commerce sector, where Swiggy operates.
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Sector and Benchmark Comparison
Swiggy's performance contrasts with its sector and broader market indices. The e-retail/e-commerce sector declined by 1.27% on the same day, while the Sensex fell by a more modest 0.35%. Swiggy underperformed its sector by 1.02%, highlighting its relative weakness. The stock's consecutive two-day fall of 3.25% further emphasises the negative momentum relative to peers.
Implications for Investors and Traders
For investors, the combination of a strong open interest increase and falling prices signals caution. The derivatives market activity suggests that traders are either initiating bearish positions or hedging against further declines. Given Swiggy's current technical and fundamental challenges, including its Strong Sell Mojo Grade and weak market cap rating, investors should carefully assess risk exposure.
Traders might view the elevated open interest as an opportunity to capitalise on expected volatility, but the directional bias appears skewed towards downside. The stock's liquidity supports active trading strategies, but the prevailing trend and market sentiment warrant prudence.
Outlook and Market Sentiment
Swiggy's deteriorating technical indicators and increased derivatives activity reflect a market consensus of caution or bearishness. The stock's inability to hold above key moving averages and the concentration of volume near intraday lows reinforce the negative outlook. Unless there is a fundamental catalyst or sectoral improvement, the current positioning suggests continued pressure on the stock price.
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Summary
Swiggy Ltd's derivatives market has experienced a pronounced surge in open interest, rising by over 21% to 10,894 contracts, signalling increased market engagement and shifting positioning. This activity coincides with a weakening equity price trend, underperformance relative to sector and benchmark indices, and a downgrade to a Strong Sell rating. The data suggests that market participants are positioning for further downside or hedging existing exposures amid a challenging sector environment.
Investors and traders should weigh the implications of this heightened derivatives activity carefully, considering the stock's technical weakness and fundamental concerns. While liquidity remains adequate for active trading, the prevailing sentiment and price action caution against aggressive long positions at this juncture.
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