Open Interest and Volume Dynamics
On 4 February 2026, Tech Mahindra’s open interest (OI) in futures and options contracts rose sharply to 52,743 from the previous 46,407 contracts, marking an increase of 6,336 contracts or 13.65%. This expansion in OI was accompanied by a total volume of 61,411 contracts traded, indicating robust participation in the derivatives market. The futures segment alone accounted for a value of approximately ₹88,093 lakhs, while options contracts represented a significantly larger notional value of ₹52,973.77 crores, underscoring the importance of options in the stock’s derivatives ecosystem.
The combined derivatives value stood at ₹96,374.81 lakhs, reflecting substantial liquidity and investor interest. The underlying stock price closed at ₹1,624, having opened with a gap down of 3.82% and touched an intraday low of ₹1,598, a decline of 6.9% from the previous close. Notably, the weighted average price of traded volumes skewed closer to the day’s low, suggesting selling pressure and bearish sentiment among participants.
Price Performance and Moving Averages
Tech Mahindra’s stock has been under pressure for two consecutive sessions, losing 5.46% cumulatively. Despite this short-term weakness, the stock remains above its 50-day, 100-day, and 200-day moving averages, signalling that the medium- to long-term trend remains intact. However, it trades below its 5-day and 20-day moving averages, indicating near-term bearish momentum. This mixed technical picture suggests that while some investors may be positioning for a correction or consolidation, others remain confident in the stock’s underlying strength.
The IT software sector, in which Tech Mahindra operates, has also experienced a decline of 5.89% on the day, slightly worse than Tech Mahindra’s 4.86% fall, while the broader Sensex index managed a modest gain of 0.17%. This relative outperformance, despite the negative price action, could imply selective buying interest or hedging activity in Tech Mahindra’s derivatives.
Investor Participation and Liquidity
Delivery volumes on 3 February surged to 16.86 lakh shares, a 25.99% increase over the five-day average, indicating rising investor participation in the cash segment. This heightened activity, combined with the derivatives market’s liquidity—capable of supporting trade sizes up to ₹5.72 crores based on 2% of the five-day average traded value—makes Tech Mahindra an attractive stock for both institutional and retail traders seeking to capitalise on volatility.
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Market Positioning and Potential Directional Bets
The surge in open interest alongside rising volumes suggests that market participants are actively repositioning themselves in Tech Mahindra’s derivatives. The increase in OI typically indicates fresh money entering the market, which can be interpreted as either new bullish or bearish bets depending on the price action and option chain data.
Given the stock’s recent price decline and the weighted average price clustering near the intraday low, it appears that a significant portion of the new open interest may be on the short side, with traders possibly anticipating further downside or hedging existing long positions. However, the fact that the stock remains above key longer-term moving averages and outperforms the sector slightly hints at a more nuanced scenario where some investors might be accumulating positions at lower levels, expecting a rebound.
Options data, with a notably large notional value, often reveals strategic plays such as protective puts or call spreads. While detailed option chain analysis is beyond the scope here, the sheer scale of option value relative to futures suggests that sophisticated investors are employing complex strategies to manage risk and capitalise on expected volatility.
Mojo Score Upgrade and Analyst Sentiment
Reflecting these dynamics, Tech Mahindra’s Mojo Score has improved to 71.0, earning a Buy grade as of 14 January 2026, upgraded from a previous Hold rating. This upgrade signals growing confidence in the stock’s fundamentals and technical outlook. The company’s large market capitalisation of ₹1,60,746 crores and its standing in the Computers - Software & Consulting sector further reinforce its appeal to investors seeking exposure to the IT space.
Despite the recent short-term price weakness, the stock’s relative resilience compared to the sector and the Sensex, combined with increased investor participation and derivatives activity, suggests that market participants are actively recalibrating their positions in anticipation of upcoming catalysts or earnings announcements.
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Implications for Investors
For investors and traders, the current open interest surge in Tech Mahindra’s derivatives market offers both opportunities and risks. The increased activity and liquidity facilitate efficient entry and exit points, while the mixed technical signals warrant cautious monitoring of price action and sector trends.
Those bullish on the stock’s medium-term prospects may view the recent dip as a buying opportunity, especially given the Mojo Buy rating and the stock’s position above key moving averages. Conversely, short-term traders might capitalise on the heightened volatility and potential downside momentum by employing protective strategies or short positions in the derivatives market.
Overall, the interplay of rising open interest, volume patterns, and price behaviour in Tech Mahindra underscores the importance of a nuanced approach that balances fundamental strength with technical caution.
Conclusion
Tech Mahindra Ltd.’s recent surge in open interest by 13.65% amid a 4.86% price decline highlights a complex market environment where investor positioning is actively evolving. The stock’s relative outperformance against the sector, combined with increased delivery volumes and a Mojo Score upgrade to Buy, suggests underlying confidence despite short-term weakness. Market participants should closely monitor derivatives activity and price trends to gauge the prevailing sentiment and potential directional moves in this large-cap IT software and consulting stock.
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