Union Bank of India Sees Sharp Open Interest Surge Amid Strong Market Momentum

Open Interest and Volume Dynamics

On 18 Feb 2026, Union Bank’s open interest in futures and options contracts rose sharply by 3,511 contracts, marking a 10.09% increase from the previous day’s 34,797 to 38,308. This uptick in OI is a strong indicator of fresh positions being established rather than existing ones being squared off, signalling heightened market participation and interest in the stock’s near-term prospects.

Volume data corroborates this trend, with total traded volume reaching 69,633 contracts. The futures segment alone accounted for a value of approximately ₹59,989 lakhs, while options contracts contributed an astronomical ₹54,259.69 crores in notional value, underscoring the intense speculative and hedging activity surrounding the stock.

The combined derivatives turnover stood at ₹68,183 lakhs, reflecting a highly liquid and active market environment. Such liquidity supports sizeable trade executions without significant price impact, making Union Bank an attractive instrument for institutional and retail traders alike.

Price Performance and Technical Strength

Union Bank’s underlying share price has mirrored the derivatives activity with a strong upward trajectory. The stock has gained 7.79% over the past three consecutive trading sessions, outperforming its public sector banking peers by 1.08% on the day. It touched an intraday high of ₹193.99, setting a fresh 52-week peak and trading comfortably above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day.

Such technical strength is often a precursor to sustained bullish momentum, supported by rising investor participation. Delivery volumes surged to 1.17 crore shares on 17 Feb, a remarkable 137.12% increase over the five-day average, indicating genuine accumulation rather than speculative churn.

Liquidity metrics further reinforce the stock’s tradability, with the capacity to absorb trades worth ₹5.38 crore based on 2% of the five-day average traded value. This ensures that market participants can enter or exit positions efficiently, a critical factor for derivatives traders.

Market Positioning and Directional Bets

The surge in open interest alongside rising volumes and price gains suggests that market participants are positioning for further upside in Union Bank’s shares. The increase in OI by over 10% in a single session is indicative of fresh long positions being built, reflecting bullish sentiment.

Options market activity, with an enormous notional value exceeding ₹54,259 crores, points to significant hedging and speculative strategies. The elevated option premium values imply that traders are willing to pay a premium for upside protection or leverage, signalling expectations of continued price appreciation or increased volatility.

Given the bank’s recent upgrade from a ‘Buy’ to a ‘Strong Buy’ rating by MarketsMOJO on 2 Feb 2026, with a robust Mojo Score of 81.0, investor confidence is further bolstered. The upgrade reflects improved fundamentals, favourable sector dynamics, and positive technical indicators, making Union Bank a compelling large-cap pick within the public sector banking space.

Sector and Benchmark Comparison

Union Bank’s 1-day return of 2.14% notably outpaced the public sector bank sector’s 0.84% gain and the broader Sensex’s marginal decline of 0.02%. This relative outperformance underscores the stock’s leadership within its sector and resilience amid mixed market conditions.

With a market capitalisation of ₹1,47,275.15 crore, Union Bank ranks as a large-cap entity, attracting institutional interest and benefiting from enhanced analyst coverage and liquidity. Its market cap grade of 1 further confirms its standing as a top-tier stock in the banking universe.

Technically, the stock’s sustained trading above all major moving averages signals a strong uptrend, reducing the likelihood of immediate downside risk. The rising delivery volumes and open interest reinforce the conviction of market participants in the stock’s bullish trajectory.

Implications for Investors and Traders

The confluence of rising open interest, strong volume, and price appreciation in Union Bank’s derivatives and cash segments suggests a favourable risk-reward profile for investors. The stock’s technical and fundamental upgrades provide a solid foundation for further gains, while the active derivatives market offers multiple avenues for strategic positioning.

Traders may consider leveraging the increased liquidity and volatility to implement directional strategies such as long futures or call options, capitalising on the bullish momentum. Meanwhile, long-term investors can view the recent upgrade and sustained accumulation as validation of the bank’s improving financial health and growth prospects.

However, as with all market moves, caution is warranted. The sharp rise in open interest and option premiums may also reflect heightened volatility expectations, which could lead to price swings. Monitoring key support levels and sector trends will be essential to manage risk effectively.

Outlook and Conclusion

Union Bank of India’s recent surge in open interest and volume, coupled with strong price performance and a ‘Strong Buy’ rating, positions it as a compelling large-cap banking stock for 2026. The market’s directional bets indicate confidence in continued upside, supported by improving fundamentals and technical strength.

Investors and traders should watch for sustained volume and OI growth as confirmation of this trend, while remaining vigilant to broader market cues. Given the bank’s leadership within the public sector banking space and robust liquidity, Union Bank is well placed to capitalise on the ongoing recovery in the financial sector.

Overall, the derivatives market activity serves as a valuable barometer of investor sentiment, signalling a positive outlook for Union Bank of India in the near term.

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