TVS Motor Company Sees Significant Open Interest Surge Amidst Mixed Market Signals

Open Interest and Volume Dynamics

On 24 Feb 2026, TVS Motor Company Ltd (NSE: TVSMOTOR) recorded an open interest (OI) of 93,544 contracts, up from 82,297 the previous day, marking a substantial increase of 11,247 contracts or 13.67%. This rise in OI was accompanied by a futures volume of 62,316 contracts, reflecting robust trading activity in the derivatives market. The combined futures and options value stood at approximately ₹25,620.65 crores, underscoring the significant liquidity and investor interest in the stock’s derivatives.

The underlying stock closed at ₹3,813, just 2.69% shy of its 52-week high of ₹3,909, indicating that despite the recent price softness, the stock remains near its peak levels. Intraday, the stock touched a low of ₹3,743.4, down 2.24%, while outperforming its sector by 0.28% and outperforming the broader Sensex, which declined by 1.16% on the same day.

Market Positioning and Investor Sentiment

The surge in open interest alongside elevated volumes typically signals fresh capital entering the market or existing positions being rolled over or expanded. In TVS Motor’s case, the increase in OI despite a slight price dip suggests that traders may be building positions anticipating a directional move, possibly bullish given the proximity to the 52-week high and the stock’s outperformance relative to its sector and benchmark indices.

Supporting this view, the stock’s price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, indicating a sustained medium- to long-term uptrend. However, it is currently trading below its 5-day moving average, reflecting some short-term consolidation or profit-taking. This mixed technical picture aligns with the observed derivatives activity, where market participants could be positioning for a breakout or a correction depending on upcoming catalysts.

Delivery volumes have surged notably, with 3.7 lakh shares delivered on 23 Feb 2026, a 102.63% increase over the five-day average delivery volume. This rise in delivery volume points to genuine investor participation rather than purely speculative trading, adding weight to the underlying bullish sentiment.

Mojo Score Upgrade and Market Capitalisation

TVS Motor Company’s recent upgrade in its Mojo Grade from Hold to Buy on 6 Nov 2025 reflects improved fundamentals and positive market outlook. The company currently holds a Mojo Score of 78.0, indicating strong overall quality and growth prospects. Its market capitalisation stands at a robust ₹1,80,651.88 crores, classifying it as a large-cap stock with significant institutional interest and liquidity.

The stock’s market cap grade is rated 1, the highest tier, underscoring its prominence in the automobile sector. This upgrade and the accompanying positive sentiment may be contributing to the increased open interest as investors position themselves for potential upside.

Directional Bets and Potential Scenarios

The increase in open interest combined with rising volumes and delivery participation suggests that market participants are actively positioning for a directional move. Given the stock’s proximity to its 52-week high and its relative outperformance, the bias appears to lean towards a bullish scenario. Traders may be anticipating strong quarterly results, new product launches, or favourable macroeconomic factors supporting the automobile sector.

However, the short-term dip below the 5-day moving average and the intraday low of ₹3,743.4 indicate some caution, possibly due to profit-booking or external market pressures. This mixed price action alongside rising OI could also imply a build-up of both long and short positions, setting the stage for increased volatility in the near term.

Investors should monitor upcoming earnings announcements, sectoral developments, and broader market trends to gauge the sustainability of this positioning. The stock’s liquidity, with a tradable size of approximately ₹3.04 crores based on 2% of the five-day average traded value, ensures that institutional and retail investors can enter or exit positions without significant price impact.

Comparative Sector and Index Performance

On the day of analysis, TVS Motor’s 1-day return was -0.69%, outperforming the automobile sector’s decline of -0.79% and the Sensex’s broader fall of -1.16%. This relative resilience highlights the stock’s defensive qualities within a volatile market environment. The automobile sector, often sensitive to economic cycles and commodity price fluctuations, has seen mixed investor sentiment recently, making TVS Motor’s positioning noteworthy.

Given the company’s strong fundamentals, upgraded Mojo Grade, and active derivatives market interest, TVS Motor is well placed to capitalise on any sectoral recovery or positive demand trends. Investors should weigh these factors alongside technical signals and broader macroeconomic indicators before making allocation decisions.

Conclusion: A Watchful Eye on Derivatives Activity

The sharp increase in open interest in TVS Motor Company’s derivatives signals a growing conviction among traders and investors about the stock’s near-term prospects. While the underlying price action shows some short-term hesitation, the overall technical and fundamental backdrop remains constructive. The upgraded Mojo Grade to Buy and strong market capitalisation further bolster the stock’s appeal.

Market participants should monitor the evolving open interest and volume patterns closely, as they often presage significant price moves. The interplay between rising delivery volumes and mixed price signals suggests a nuanced market positioning, with both bulls and bears actively engaged. This dynamic sets the stage for potential volatility and trading opportunities in the coming sessions.

In summary, TVS Motor Company Ltd remains a compelling stock within the automobile sector, supported by robust fundamentals, active derivatives interest, and positive market sentiment. Investors with a medium- to long-term horizon may find the current environment favourable, while short-term traders should remain vigilant to shifts in market positioning and technical cues.

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