Open Interest and Volume Dynamics
On 25 Feb 2026, Union Bank of India’s open interest (OI) in derivatives rose sharply by 2,409 contracts, an 11.54% increase from the previous day’s 20,874 contracts to 23,283. This surge in OI was accompanied by a futures volume of 19,664 contracts, indicating robust trading activity. The futures value stood at approximately ₹50,725.56 lakhs, while the options segment contributed a substantial ₹12,769.21 crores in value, culminating in a total derivatives turnover of ₹54,421.39 lakhs for the day.
This spike in open interest, combined with high volume, typically reflects fresh positions being established rather than existing ones being squared off. Such a pattern often points to increased conviction among market participants regarding the stock’s near-term direction.
Price Action and Moving Averages
Union Bank’s underlying share price closed at ₹197, having hit a new 52-week high of ₹202.54 earlier in the session. However, the stock underperformed its sector by 0.33% and declined by 1.67% on the day, contrasting with the Sensex’s modest gain of 0.22%. Notably, the stock remains comfortably above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a sustained uptrend despite the recent pullback.
The recent three-day rally reversal suggests some profit booking or short-term caution among traders, yet the overall technical setup remains constructive. The delivery volume of 79.5 lakh shares on 24 Feb fell by 11.35% compared to the five-day average, indicating a slight decline in investor participation at the delivery level, which may be contributing to the price softness.
Market Positioning and Directional Bets
The increase in open interest alongside a price decline can be interpreted in multiple ways. One possibility is that fresh short positions are being initiated, anticipating further downside. Alternatively, it could reflect long positions being added at lower levels, expecting a rebound after the recent dip. The substantial options turnover suggests active hedging and speculative strategies are in play, with traders possibly positioning for volatility around key technical levels.
Given the stock’s strong technical backdrop and recent upgrade in Mojo Grade from Buy to Strong Buy on 2 Feb 2026, with a high Mojo Score of 81.0, the market’s directional bias appears cautiously optimistic. The large market capitalisation of ₹1,50,580.50 crore and liquidity supporting trade sizes up to ₹8.22 crore further enhance the stock’s appeal for institutional and retail investors alike.
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Comparative Sector and Market Context
Within the public sector banking space, Union Bank’s recent performance and derivatives activity stand out. The sector recorded a 1.08% decline on the day, underlining broader headwinds. Yet, Union Bank’s ability to maintain its position above key moving averages and attract increased open interest suggests relative strength. This divergence may indicate that traders are selectively positioning in Union Bank, anticipating it to outperform peers in the medium term.
Moreover, the Sensex’s positive return of 0.22% on the same day highlights a mixed market environment where sector-specific factors and stock-specific fundamentals are driving differentiated outcomes.
Implications for Investors and Traders
For investors, the strong Mojo Grade upgrade to Strong Buy and the high Mojo Score reinforce the stock’s favourable fundamental and technical outlook. The recent open interest surge in derivatives could be signalling increased institutional interest or speculative positioning ahead of upcoming corporate developments or macroeconomic events.
Traders should monitor the evolving open interest and volume patterns closely, especially in the options segment, to gauge shifts in market sentiment and potential volatility. The interplay between price action and derivatives positioning will be critical in identifying whether the current pullback is a temporary correction or the start of a deeper trend reversal.
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Outlook and Conclusion
Union Bank of India’s recent surge in open interest and sustained volume levels in the derivatives market underscore a heightened interest in the stock’s near-term prospects. While the price correction after a three-day rally introduces some caution, the overall technical and fundamental indicators remain supportive.
Investors should weigh the strong Mojo Grade and large-cap status against the current market volatility and sectoral pressures. The derivatives data suggests that market participants are actively positioning for potential directional moves, making Union Bank a stock to watch closely in the coming sessions.
In summary, the combination of rising open interest, robust volume, and a solid technical foundation points to a dynamic trading environment for Union Bank of India, with opportunities for both investors and traders who can navigate the nuances of market positioning and sentiment shifts.
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