Open Interest and Volume Dynamics
On 20 Feb 2026, UltraTech Cement's open interest in futures and options contracts rose sharply to 79,794 from the previous 68,122, marking an increase of 11,672 contracts or 17.13%. This surge in OI was accompanied by a daily volume of 60,190 contracts, reflecting active trading interest. The futures value stood at ₹1,73,775 lakhs, while the options segment exhibited a substantial notional value of approximately ₹21,258 crores, underscoring the stock's prominence in the derivatives market.
The total combined derivatives value reached ₹1,74,734 lakhs, indicating strong liquidity and investor engagement. Such a rise in open interest alongside elevated volume typically points to fresh positions being initiated rather than existing ones being squared off, often interpreted as a sign of conviction in the underlying asset's future direction.
Price Performance and Technical Context
UltraTech Cement closed at ₹12,811, just 2.43% shy of its 52-week high of ₹13,110, demonstrating resilience and sustained buying interest. The stock outperformed its sector by 0.39% on the day, delivering a 0.76% gain compared to the Cement & Cement Products sector's 0.31% and the broader Sensex's 0.62% rise.
Technically, the share price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a strong medium- to long-term uptrend. However, it trades slightly below the 5-day moving average, suggesting some short-term consolidation or profit booking. The delivery volume on 19 Feb was 97,600 shares, marginally up by 0.31% against the five-day average, indicating steady investor participation in the cash market.
Market Positioning and Sentiment
The notable increase in open interest, combined with rising volumes and price strength, suggests that market participants are positioning for a potential upside in UltraTech Cement. The derivatives activity indicates that traders are likely taking fresh long positions, anticipating further gains in the near term. This is consistent with the stock's large-cap status and robust market capitalisation of ₹3,76,717.85 crores, which attracts institutional interest.
Despite the recent upgrade in investor participation, the MarketsMOJO Mojo Score for UltraTech Cement currently stands at 64.0 with a Mojo Grade of Hold, downgraded from Buy on 16 Feb 2026. This reflects a cautious stance given valuation considerations and sector headwinds, even as the technical and derivatives data point to positive momentum.
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Implications for Investors and Traders
The surge in open interest and volume in UltraTech Cement's derivatives contracts is a key indicator of shifting market positioning. Traders appear to be placing directional bets, likely bullish, given the stock's proximity to its 52-week high and positive relative performance. This could be driven by expectations of sustained demand in the cement sector, supported by infrastructure growth and government spending.
However, the downgrade in the Mojo Grade to Hold signals that investors should remain vigilant. Valuation pressures and potential sector cyclicality may temper upside potential. The stock's liquidity, with a tradable size of approximately ₹3.98 crores based on 2% of the five-day average traded value, ensures that institutional and retail investors can execute sizeable trades without significant market impact.
Sector and Broader Market Context
Within the Cement & Cement Products sector, UltraTech Cement remains a dominant player with a large market cap and strong brand presence. The sector has shown moderate gains, but UltraTech's outperformance highlights its relative strength. The Sensex's 0.62% gain on the day further supports a positive market environment, although global macroeconomic factors and commodity price fluctuations remain key risks.
Investors should also note that the stock's futures and options market activity reflects a complex interplay of hedging and speculative strategies. The substantial options notional value suggests active call and put writing, which could influence near-term volatility and price movements.
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Outlook and Strategic Considerations
Given the current derivatives market activity and price trends, UltraTech Cement appears poised for cautious optimism. The open interest surge indicates that traders are positioning for potential upside, but the Hold rating and recent downgrade suggest that investors should weigh risks carefully. Monitoring further changes in open interest, volume, and price action will be critical to gauge the sustainability of this momentum.
For long-term investors, the stock's strong fundamentals and sector leadership remain attractive, but valuation discipline is essential. Traders may consider leveraging the derivatives market to hedge or capitalise on short-term directional moves, given the stock's liquidity and active options market.
Overall, UltraTech Cement's recent open interest spike is a noteworthy development that reflects evolving market sentiment and strategic positioning in one of India's key industrial sectors.
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