Open Interest and Volume Dynamics
On 12 Feb 2026, Tech Mahindra’s open interest (OI) in derivatives rose sharply by 5,499 contracts, a 10.15% increase from the previous day’s 54,171 to 59,670. This rise in OI was accompanied by a volume of 63,109 contracts, indicating robust trading activity. The futures segment alone accounted for a value of approximately ₹71,150 lakhs, while options contributed a staggering ₹53,880.12 crores, culminating in a total derivatives value of ₹79,339.52 lakhs. This surge in open interest amidst elevated volumes suggests fresh positions are being established rather than existing ones being squared off.
Price Action and Market Context
Despite the increased derivatives activity, Tech Mahindra’s stock price declined by 4.31% on the day, closing near its intraday low of ₹1,554, down 4.92%. The weighted average price of traded shares was closer to this low, signalling selling pressure. The stock has now recorded losses over two consecutive sessions, falling nearly 4.97% in this period. This underperformance is in line with the broader IT - Software sector, which declined by 4.5%, and contrasts with the relatively modest 0.48% fall in the Sensex.
Interestingly, the stock’s price remains above its 100-day and 200-day moving averages, indicating a longer-term support zone. However, it trades below its 5-day, 20-day, and 50-day moving averages, reflecting short- to medium-term bearish momentum. This technical divergence may be contributing to the mixed sentiment observed in derivatives positioning.
Investor Participation and Liquidity
Delivery volume on 11 Feb was 9.77 lakh shares, down 23.54% from the five-day average, suggesting waning investor participation in the cash segment. However, liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹5.35 crores based on 2% of the five-day average traded value. This liquidity profile supports active derivatives trading and allows institutional players to take sizeable positions without significant market impact.
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Directional Bets and Market Positioning
The surge in open interest alongside a falling stock price suggests that market participants are actively repositioning, possibly anticipating further downside or hedging existing exposures. The increase in futures open interest indicates fresh short positions or protective puts being established, while the substantial options value points to complex strategies such as spreads or straddles being employed.
Given Tech Mahindra’s Mojo Score of 71.0 and an upgraded Mojo Grade from Hold to Buy as of 11 Feb 2026, some investors may view the current dip as a buying opportunity. The stock’s large market capitalisation of ₹1,52,987 crores and its classification within the Computers - Software & Consulting sector make it a key bellwether for IT sector sentiment. However, the recent decline in investor delivery volumes and the stock’s short-term technical weakness caution against aggressive bullish bets.
Sector and Benchmark Comparison
Tech Mahindra’s 1-day return of -4.34% closely mirrors the IT sector’s decline of -4.55%, indicating sector-wide pressures rather than company-specific issues. The Sensex’s relatively muted fall of -0.48% highlights the concentrated weakness in IT stocks. This sectoral underperformance may be driven by broader concerns such as global tech demand, currency fluctuations, or earnings outlook revisions.
Technical and Fundamental Outlook
From a technical standpoint, the stock’s position above long-term moving averages provides a cushion against deeper falls, but the breach below shorter-term averages signals caution. The weighted average price clustering near the day’s low suggests sellers dominated trading, potentially foreshadowing further downside in the near term.
Fundamentally, Tech Mahindra’s upgrade to a Buy grade by MarketsMOJO reflects improved financial metrics and positive earnings revisions. The company’s strong market cap grade of 1 underscores its large-cap status and relative stability. Investors should monitor upcoming quarterly results and sector developments to gauge whether the current derivatives activity translates into sustained price movements.
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Implications for Investors
Investors should interpret the open interest surge as a sign of increased market attention and potential volatility ahead. The combination of falling prices and rising derivatives activity often precedes significant directional moves, either continuation of the downtrend or a sharp reversal if short positions are unwound.
Given the stock’s large-cap status and sector influence, traders may consider using options strategies to hedge exposure or capitalise on volatility. Meanwhile, long-term investors should weigh the recent technical weakness against the company’s fundamental strengths and upgraded rating before making allocation decisions.
Conclusion
Tech Mahindra’s derivatives market activity on 12 Feb 2026 reveals a complex interplay of bearish sentiment and cautious optimism. The 10.15% rise in open interest amid a 4.31% price decline highlights active repositioning by market participants. While the stock faces short-term headwinds aligned with sector weakness, its upgraded Mojo Grade and strong market capitalisation provide a foundation for potential recovery. Close monitoring of volume patterns, open interest trends, and sector developments will be crucial for investors seeking to navigate this evolving landscape.
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