Tata Motors Passenger Vehicles Sees Significant Open Interest Surge Amid Bearish Momentum

Open Interest and Volume Dynamics

On 23 Jan 2026, Tata Motors Passenger Vehicles Ltd recorded an open interest (OI) of 2,32,758 contracts, up from 2,11,578 the previous day, marking an absolute increase of 21,180 contracts or 10.01%. This rise in OI was accompanied by a futures volume of 1,60,485 contracts, indicating robust trading activity in the derivatives market. The futures value stood at approximately ₹1,80,186.5 lakhs, while the options segment exhibited a substantially larger notional value of ₹27,433.79 crores, underscoring the significant speculative interest in options.

The total combined derivatives value reached ₹1,83,392.1 lakhs, reflecting a sizeable liquidity pool for TMPV derivatives. This surge in open interest, coupled with elevated volumes, often suggests fresh positions being established rather than existing ones being squared off, hinting at increased conviction among traders.

Price and Technical Context

Despite the derivatives market activity, TMPV’s underlying share price closed at ₹342, which is just 3.85% above its 52-week low of ₹331.09. The stock underperformed the broader Sensex, which declined by 0.75%, but marginally outperformed its sector, the Automobiles sector, which fell 1.09%. Notably, TMPV’s price has reversed after two consecutive days of gains, signalling potential short-term weakness.

Technically, the stock is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a sustained downtrend. This technical backdrop suggests that despite the surge in derivatives activity, the underlying sentiment remains cautious or bearish among long-term investors.

Investor Participation and Liquidity

Investor participation appears to be waning, with delivery volumes on 22 Jan falling by 11.93% to 56.29 lakh shares compared to the five-day average. This decline in delivery volume suggests reduced conviction among long-term holders or profit-booking by investors. However, the stock remains sufficiently liquid, with a trade size capacity of ₹8.56 crore based on 2% of the five-day average traded value, facilitating active trading for institutional and retail participants alike.

Market Positioning and Directional Bets

The sharp increase in open interest, particularly in the futures segment, suggests that traders are actively repositioning themselves in TMPV. Given the stock’s proximity to its 52-week low and the prevailing downtrend, this OI surge could indicate a mix of speculative short positions being added or hedging activity by institutional players.

Options market data, with an enormous notional value exceeding ₹27,433 crores, points to significant interest in both calls and puts, though the exact skew is not disclosed. This large options interest often reflects hedging strategies or directional bets, with traders possibly anticipating volatility or a potential reversal in the near term.

It is important to note that the company’s Mojo Score currently stands at 36.0, with a Mojo Grade of Sell, downgraded from Hold on 4 Nov 2024. The market cap grade is 1, indicating a large-cap status but with weak momentum and fundamental signals. This downgrade aligns with the technical weakness and subdued investor participation observed.

Sector and Broader Market Comparison

Within the Automobiles sector, TMPV’s performance is slightly better than the sector average on the day, but the overall sector remains under pressure. The Sensex’s decline of 0.75% reflects a cautious market environment, possibly influenced by macroeconomic factors or sector-specific challenges such as supply chain disruptions or regulatory changes.

Given the mixed signals — rising derivatives activity but weak price action and falling delivery volumes — investors should exercise caution. The derivatives market’s increased open interest may be signalling a build-up of positions ahead of potential news or earnings announcements, but the technical and fundamental indicators suggest limited upside in the near term.

Outlook and Investor Considerations

For investors and traders, the current scenario presents a nuanced picture. The surge in open interest and volume in derivatives indicates active positioning, which could precede a significant price move. However, the technical downtrend and falling delivery volumes caution against aggressive long positions at this stage.

Investors should monitor upcoming corporate announcements, quarterly results, and sector developments closely, as these could act as catalysts for a directional breakout or further decline. Additionally, tracking changes in options open interest and put-call ratios may provide further clues on market sentiment and potential volatility.

Given the current Mojo Grade of Sell and the downgrade from Hold, a conservative approach is advisable. Investors might consider hedging existing positions or exploring alternative stocks with stronger momentum and fundamentals within the automobile sector or broader market.

Summary

Tata Motors Passenger Vehicles Ltd’s derivatives market activity has intensified with a 10.01% rise in open interest, signalling increased speculative and hedging interest. Despite this, the stock remains technically weak, trading below all major moving averages and close to its 52-week low. Falling delivery volumes and a recent downgrade to a Sell rating underscore the cautious sentiment prevailing among investors. While the derivatives surge could foreshadow a significant move, the overall outlook remains subdued, warranting careful monitoring and selective positioning.

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