Avenue Supermarts Ltd Sees Robust Call Option Activity Ahead of January Expiry

Strong Call Option Volumes Highlight Bullish Sentiment

On 12 January 2026, Avenue Supermarts Ltd recorded substantial call option activity, particularly for contracts expiring on 27 January 2026. The most actively traded strike prices were 3800, 3850, 3950, 4100, and 4200, all above the underlying spot price of ₹3,893.20. The highest number of contracts traded was at the 4100 strike with 5,838 contracts, followed closely by 5,319 contracts at 3850 and 5,236 contracts at 3800 strikes. This clustering of open interest and turnover at out-of-the-money strikes suggests that traders are positioning for a potential upward move in the stock over the next two weeks.

Turnover figures reinforce this bullish stance, with the 3800 strike alone generating ₹1165.46 lakhs in turnover, the largest among all strikes. The 3850 and 3950 strikes also saw hefty turnovers of ₹948.24 lakhs and ₹541.76 lakhs respectively. Open interest data further supports this trend, with the 3800 strike holding the highest open interest of 2,122 contracts, indicating sustained interest and potential accumulation by market participants.

Underlying Stock Performance and Technical Context

Despite the bullish derivatives activity, Avenue Supermarts Ltd’s underlying stock performance presents a nuanced picture. The stock has gained 2.36% on the day, outperforming the Sensex which declined by 0.47%, and marginally ahead of the retail sector’s 2.01% gain. It has recorded a consecutive two-day gain, delivering a 2.7% return over this period. Intraday, the stock touched a high of ₹3,918.60, a 3.09% increase from the previous close.

Technically, the stock is trading above its 5-day and 20-day moving averages but remains below its 50-day, 100-day, and 200-day averages. This suggests short-term strength but longer-term resistance remains intact. The rising delivery volume of 3.87 lakh shares on 9 January, a 26.2% increase over the five-day average, indicates growing investor participation, which could support further price appreciation if sustained.

Mojo Score and Market Cap Grade Reflect Caution

MarketsMOJO’s latest assessment downgraded Avenue Supermarts Ltd’s Mojo Grade from Hold to Sell on 31 October 2025, reflecting concerns over valuation and near-term growth prospects. The company’s Mojo Score stands at 38.0, a relatively low figure signalling weak overall fundamentals and technicals. Its Market Cap Grade is 1, indicating a large-cap status but with limited upside potential according to the proprietary scoring system.

Given this backdrop, the heavy call option activity may be driven by speculative traders or hedgers anticipating a short-term rally, rather than a broad-based institutional endorsement. Investors should weigh these factors carefully before increasing exposure.

Expiry Patterns and Strike Price Distribution

The concentration of call option trades around the 3800 to 4200 strike range for the 27 January expiry suggests that traders are betting on a 3.5% to 8% upside from the current underlying price within the next two weeks. The 4200 strike, with 3,256 contracts traded and ₹76.58 lakhs turnover, represents the most optimistic positioning, implying a target price approximately 8% above the current level.

Open interest figures across these strikes indicate that the 3800 and 4100 strikes are focal points for both new positions and rollovers, with 2,122 and 1,831 contracts respectively. This pattern is typical of traders seeking to capitalise on expected volatility or directional moves ahead of expiry.

Sectoral Context and Liquidity Considerations

Avenue Supermarts Ltd operates within the diversified retail sector, which has gained 2.36% on the day, reflecting a positive environment for consumer-facing stocks. The stock’s liquidity profile is robust, with a delivery volume of 3.87 lakh shares and a traded value sufficient to support trades up to ₹5.9 crore without significant market impact. This liquidity facilitates active options trading and allows institutional players to enter or exit positions efficiently.

Investor Takeaways and Outlook

While the surge in call option volumes signals bullish sentiment, investors should approach Avenue Supermarts Ltd with caution given its recent downgrade and mixed technical signals. The stock’s current trading range, combined with the expiry patterns, suggests a near-term upside potential of up to 8%, but this is tempered by the company’s modest Mojo Score and Sell rating.

For traders, the active options market offers opportunities to capitalise on volatility and directional moves, but for long-term investors, a careful analysis of fundamentals and sector dynamics remains essential. The retail sector’s positive momentum provides a supportive backdrop, yet valuation concerns and competitive pressures in the diversified retail space warrant vigilance.

Overall, Avenue Supermarts Ltd’s derivatives activity reflects a market balancing optimism with caution, making it a stock to watch closely as the January expiry approaches.

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