Open Interest and Volume Dynamics
On 26 Feb 2026, Zydus Lifesciences recorded an open interest of 16,785 contracts in its futures and options, marking a 10.95% increase from the previous day’s 15,128 contracts. This 1,657-contract rise in OI was accompanied by a volume of 16,809 contracts, indicating robust trading activity. The futures segment alone accounted for a value of approximately ₹16,320.23 lakhs, while the options segment’s notional value stood at an impressive ₹12,949.78 crores, culminating in a total derivatives value of ₹18,963.85 lakhs.
The underlying stock price closed at ₹938, having touched an intraday high of ₹947.55, a 3.03% gain on the day. This price movement outpaced the Pharmaceuticals & Biotechnology sector’s 0.66% gain and the Sensex’s modest 0.21% rise, reflecting relative strength in Zydus Lifesciences.
Price and Moving Average Analysis
Zydus Lifesciences has been on a two-day consecutive gain streak, delivering a cumulative return of 3.83%. The stock’s price currently trades above its 5-day, 20-day, 50-day, and 100-day moving averages, signalling short- to medium-term bullish momentum. However, it remains below the 200-day moving average, indicating that the longer-term trend is yet to confirm a sustained uptrend.
Investor participation has also risen sharply, with delivery volumes on 25 Feb reaching 3.51 lakh shares, a 104.92% increase over the five-day average delivery volume. This heightened participation suggests growing conviction among investors, potentially supporting the recent price appreciation.
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Market Positioning and Derivatives Sentiment
The surge in open interest alongside rising volumes typically indicates fresh positions being established rather than existing ones being squared off. In Zydus Lifesciences’ case, the 10.95% increase in OI coupled with a 1.67% day change in price suggests that traders are positioning for a potential upward move.
Futures value of ₹16,320.23 lakhs and options value exceeding ₹12,949 crores highlight significant liquidity and interest in the derivatives market for this stock. The elevated options notional value points to active call and put writing, with market participants likely hedging or speculating on volatility and directional moves.
Given the stock’s outperformance relative to its sector and the broader market, the derivatives activity may be reflecting bullish sentiment, with traders anticipating further gains. However, the downgrade in mojo grade to Sell from Hold on 1 Dec 2025, with a mojo score of 48.0, signals caution from fundamental analysts, suggesting that the stock’s valuation or other metrics may not fully support a sustained rally.
Liquidity and Trading Viability
Zydus Lifesciences’ liquidity profile remains adequate for sizeable trades, with the stock’s traded value supporting a trade size of approximately ₹0.97 crore based on 2% of the five-day average traded value. This liquidity ensures that institutional and retail investors can enter or exit positions without significant price impact, an important consideration for derivatives traders and long-term investors alike.
The stock’s market capitalisation stands at ₹93,600 crore, placing it firmly in the mid-cap category. This size offers a balance between growth potential and stability, attracting a diverse investor base.
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Implications for Investors and Traders
The recent spike in open interest and volume in Zydus Lifesciences’ derivatives market suggests that traders are actively positioning for a directional move, likely bullish given the price outperformance and rising investor participation. However, the fundamental downgrade to a Sell rating by MarketsMOJO tempers enthusiasm, indicating that valuation concerns or sector headwinds may weigh on the stock in the medium term.
Investors should carefully monitor the stock’s ability to sustain gains above key moving averages, particularly the 200-day average, which remains a critical resistance level. Additionally, tracking changes in open interest and volume in the coming sessions will provide further clues on whether the bullish momentum is broad-based or driven by short-term speculative activity.
For derivatives traders, the high notional values and liquidity offer ample opportunities to implement strategies such as spreads, straddles, or directional bets, but risk management remains paramount given the mixed fundamental signals.
Overall, Zydus Lifesciences presents a complex picture of rising market interest amid cautious fundamental outlooks, underscoring the importance of a balanced approach to trading and investment decisions in this mid-cap pharmaceutical stock.
Summary
Zydus Lifesciences Ltd’s derivatives market activity on 26 Feb 2026 highlights a significant increase in open interest and volume, reflecting heightened market participation and potential bullish positioning. The stock’s price performance outpaced its sector and the broader market, supported by rising delivery volumes and favourable short-term moving averages. However, the downgrade to a Sell mojo grade and the stock’s position below the 200-day moving average suggest caution. Investors and traders should weigh these factors carefully, considering both technical momentum and fundamental assessments before making decisions.
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