Swiggy Ltd Sees Sharp Surge in Open Interest Amidst Bearish Price Action

Open Interest and Volume Spike: A Closer Look

On 6 January 2026, Swiggy Ltd’s open interest (OI) in futures and options contracts soared to 18,391 from 10,838 the previous day, marking a substantial increase of 7,553 contracts or 69.69%. This surge in OI was accompanied by a total volume of 27,687 contracts traded, indicating robust participation from market participants. The futures segment alone accounted for a value of approximately ₹50,857.6 lakhs, while the options segment’s notional value was an overwhelming ₹8,319.3 crores, culminating in a combined derivatives turnover of ₹52,750.6 lakhs.

The underlying stock price closed at ₹358, having touched an intraday low of ₹356.35, down 5.48% on the day. This decline contrasts sharply with the sector’s modest gain of 0.48% and the Sensex’s slight fall of 0.37%, underscoring Swiggy’s relative weakness in the current market environment.

Price Action and Moving Averages Signal Bearish Sentiment

Swiggy’s price has been on a downward trajectory for three consecutive sessions, cumulatively losing 8.46% in returns. The weighted average price of traded volumes skewed closer to the day’s low, suggesting selling pressure dominated trading activity. Furthermore, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reinforcing the prevailing bearish technical setup.

Investor participation has notably increased, with delivery volumes rising to 44.14 lakh shares on 5 January, a 33.76% jump compared to the five-day average. This heightened engagement amid falling prices may indicate a mix of short-covering and fresh short positions being established.

Market Positioning and Potential Directional Bets

The sharp rise in open interest alongside falling prices typically signals that new short positions are being added rather than existing longs unwinding. This is consistent with Swiggy’s recent downgrade from a ‘Sell’ to a ‘Strong Sell’ rating by MarketsMOJO on 4 December 2025, reflecting deteriorating fundamentals and market sentiment. The company’s Mojo Score stands at a low 23.0, with a Market Cap Grade of 2, indicating mid-cap status but limited quality metrics.

Given the substantial increase in derivatives activity, traders appear to be positioning for further downside or increased volatility. The futures value traded at ₹50,857.6 lakhs and the options notional value exceeding ₹8,319 crores suggest significant hedging and speculative interest. The imbalance between rising OI and declining prices often precedes sharp directional moves, making Swiggy a focal point for short-term market participants.

Comparative Performance and Sector Context

Swiggy’s underperformance relative to its E-Retail/E-Commerce sector peers is stark. While the sector gained 0.48% on the day, Swiggy declined by 5.37%, reflecting company-specific challenges. The stock’s market capitalisation stands at ₹1,00,820 crore, placing it firmly in the mid-cap category but with a deteriorating quality grade as per MarketsMOJO’s assessment.

The persistent fall below all major moving averages suggests that the stock is in a downtrend phase, with resistance levels likely to be encountered near the 5-day and 20-day averages. The rising delivery volumes indicate that investors are actively trading the stock, possibly reallocating capital away from Swiggy towards more promising opportunities within the sector or broader market.

Implications for Investors and Traders

For investors, the combination of a strong open interest surge and weakening price action signals caution. The ‘Strong Sell’ Mojo Grade upgrade from ‘Sell’ on 4 December 2025 reflects a worsening outlook, likely driven by fundamental concerns such as competitive pressures, margin compression, or slowing growth in the e-commerce space.

Traders should note the elevated derivatives activity as a sign of increased volatility and potential directional bets. The large notional values in options suggest that market participants are hedging or speculating on significant price moves, possibly anticipating further downside or sharp rebounds depending on upcoming corporate or macroeconomic developments.

Outlook and Strategic Considerations

Swiggy’s current technical and derivatives market signals suggest a cautious stance. The strong increase in open interest amid falling prices is a classic indication of fresh short positions being established, which could lead to further downside pressure in the near term. Investors should closely monitor upcoming earnings reports, sector developments, and broader market trends to gauge if the stock can stabilise or if the downtrend will persist.

Given the stock’s liquidity profile, with a trade size capacity of approximately ₹4.43 crore based on 2% of the five-day average traded value, institutional investors can execute sizeable trades without excessive market impact. However, the deteriorating Mojo Score and downgrade to Strong Sell highlight fundamental risks that may outweigh short-term trading opportunities.

In summary, Swiggy Ltd’s derivatives market activity reveals a market positioning that favours bearish bets, reflecting investor concerns over the company’s near-term prospects. While the broader e-commerce sector remains competitive and dynamic, Swiggy’s current technical and fundamental indicators suggest that investors should exercise prudence and consider alternative opportunities within the space.

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