Union Bank of India Sees Significant Open Interest Surge Amid Bullish Market Momentum

Open Interest and Volume Dynamics

On 28 January 2026, Union Bank of India’s open interest (OI) in futures and options contracts rose sharply by 2,580 contracts, marking a 10.86% increase from the previous day’s 23,762 to 26,342. This substantial rise in OI, coupled with a daily volume of 20,338 contracts, indicates fresh positions being established rather than existing ones being squared off. The futures value stood at ₹32,072.63 lakhs, while the options segment contributed a massive ₹13,441.09 crores, culminating in a total derivatives value of ₹35,852.57 lakhs.

Such a pronounced increase in open interest alongside robust volume typically signals strong conviction among market participants. It suggests that traders are positioning themselves for a directional move, with the majority likely anticipating an upward trajectory given the concurrent price action.

Price Performance and Technical Indicators

Union Bank’s underlying stock closed at ₹180, just 1.63% shy of its 52-week high of ₹182.90. The stock has gained 4.17% over the past two consecutive trading sessions, outperforming the Public Sector Bank sector by 0.57% and the broader Sensex by 2.56%. Intraday, the share touched a high of ₹180.25, reflecting strong buying interest.

Technically, the stock is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a sustained uptrend. The rising delivery volume of 94.39 lakh shares on 27 January, up 1.34% from the five-day average, further confirms increasing investor participation and confidence in the stock’s near-term prospects.

Market Capitalisation and Sector Context

With a market capitalisation of ₹1,37,549.94 crores, Union Bank of India is firmly positioned as a large-cap entity within the Public Sector Bank industry. Its recent performance has been buoyed by improving fundamentals and a positive macroeconomic backdrop for the banking sector, including easing credit growth concerns and stable asset quality metrics.

Interpreting the Open Interest Surge: Directional Bets and Market Positioning

The 10.86% increase in open interest is a clear indication that traders are actively building positions in Union Bank’s derivatives. Given the stock’s recent price appreciation and proximity to its 52-week high, the majority of this fresh OI is likely long in nature, reflecting bullish sentiment.

Options data further supports this view. The substantial options value of over ₹13,441 crores suggests significant activity in call options, which are typically used to express upside bets or hedge existing long positions. The futures market’s sizeable ₹32,072.63 lakhs value also points to strong institutional participation, as futures contracts are often preferred by large players for directional exposure.

Moreover, the stock’s liquidity profile, with a tradable size of ₹6.59 crores based on 2% of the five-day average traded value, ensures that these positions can be efficiently entered and exited without undue price impact. This liquidity is crucial for sustaining the momentum and attracting further participation from both retail and institutional investors.

Mojo Score Upgrade and Analyst Sentiment

Reflecting the positive technical and fundamental developments, MarketsMOJO has upgraded Union Bank of India’s Mojo Grade from Hold to Buy as of 28 October 2025. The current Mojo Score stands at a robust 78.0, signalling strong conviction in the stock’s upside potential. The market cap grade remains at 1, confirming its status as a large-cap stock with solid institutional interest.

Analysts highlight the bank’s improving asset quality, steady credit growth, and enhanced operational efficiencies as key drivers supporting the bullish outlook. The recent open interest surge in derivatives aligns well with this constructive narrative, suggesting that market participants are positioning ahead of anticipated positive earnings and sector tailwinds.

Risks and Considerations

While the open interest surge and price momentum are encouraging, investors should remain mindful of potential volatility inherent in banking stocks, especially public sector banks. Macroeconomic factors such as interest rate fluctuations, regulatory changes, and credit cycle dynamics could impact performance.

Additionally, derivatives markets can sometimes reflect speculative positioning that may unwind abruptly. Therefore, monitoring changes in open interest alongside price and volume trends remains essential for gauging the sustainability of the current bullish stance.

Conclusion

Union Bank of India’s recent open interest surge in derivatives, combined with strong volume and price action, signals a clear bullish market positioning. The stock’s technical strength, improved mojo rating, and sector tailwinds provide a compelling case for investors to consider fresh exposure. However, prudent risk management and continuous monitoring of market developments are advised to capitalise on this opportunity effectively.

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