Bajaj Auto Ltd Sees Surge in Call Option Activity Ahead of January Expiry

Robust Call Option Activity Highlights Investor Confidence

The call option with a strike price of ₹9,300 expiring on 27 January 2026 has emerged as the most actively traded contract for Bajaj Auto Ltd. on the derivatives front. A total of 5,716 contracts changed hands, generating a turnover of approximately ₹1194.79 lakhs. Open interest stands at 1,425 contracts, indicating sustained investor interest and potential for further price movement in the underlying stock.

This level of activity in call options suggests a predominantly bullish positioning, as traders are willing to pay premiums for the right to buy shares at ₹9,300, which is slightly below the current underlying value of ₹9,370. The proximity of the strike price to the spot price implies expectations of upward momentum in the stock price over the coming weeks.

Price and Technical Trends Support Positive Outlook

Bajaj Auto Ltd. closed the latest trading session just 1.22% shy of its 52-week high of ₹9,490, underscoring its strong price performance. The stock has recorded gains for three consecutive days, delivering a cumulative return of 3.43% during this period. This steady upward trajectory is further supported by the stock trading above all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling robust technical strength and investor confidence.

Additionally, delivery volume on 30 December surged to 2.24 lakh shares, marking a 68.43% increase over the five-day average delivery volume. This rise in investor participation highlights growing conviction in the stock’s near-term prospects, reinforcing the bullish sentiment reflected in the options market.

Comparative Performance and Sectoral Context

On the day of analysis, Bajaj Auto Ltd. outperformed both its sector and the broader market indices. The stock posted a 1.05% gain, compared to a 0.95% rise in the automobile sector and a 0.50% increase in the Sensex. This relative outperformance is noteworthy given the large-cap status of Bajaj Auto, with a market capitalisation of ₹2,60,489 crores, underscoring its significance within the sector and the broader market.

Liquidity metrics also support active trading, with the stock’s average traded value over five days sufficient to accommodate trade sizes of up to ₹4.59 crores without significant market impact. This liquidity ensures that both institutional and retail investors can participate effectively in the stock and its derivatives.

Mojo Score and Rating Upgrade Reflect Improving Fundamentals

Bajaj Auto Ltd. currently holds a Mojo Score of 58.0, categorised as a 'Hold' rating. This represents an upgrade from a previous 'Sell' rating as of 22 December 2025, signalling improving fundamentals and market perception. Despite the cautious rating, the recent upgrade indicates that the company’s financial and operational metrics have stabilised or improved, warranting closer attention from investors.

The Market Cap Grade of 1 confirms Bajaj Auto’s position as a large-cap stock, which typically offers greater stability and lower volatility compared to mid- and small-cap peers. This status, combined with the recent positive price action and options market activity, suggests a balanced risk-reward profile for investors considering exposure to the automobile sector.

Expiry Patterns and Investor Positioning

The expiry date of 27 January 2026 for the most active call options provides a medium-term horizon for investors betting on Bajaj Auto’s price appreciation. This expiry is roughly four weeks away from the current date, allowing sufficient time for the stock to capitalise on positive catalysts such as festive season demand, new product launches, or favourable policy announcements impacting the automobile sector.

Open interest data reveals that the 1,425 contracts outstanding at the ₹9,300 strike price represent a significant build-up of bullish bets. This accumulation suggests that investors are positioning for a potential breakout above the current price levels, anticipating further gains beyond the strike price before expiry.

Risks and Considerations

While the call option activity and technical indicators point to a positive near-term outlook, investors should remain mindful of potential risks. The automobile sector is sensitive to macroeconomic factors such as fuel prices, interest rates, and regulatory changes. Additionally, global supply chain disruptions could impact production and sales volumes, affecting Bajaj Auto’s earnings trajectory.

Moreover, the Mojo Grade of 'Hold' indicates that while the stock is not currently a strong buy, it is also not a sell, reflecting a cautious stance amid evolving market conditions. Investors should weigh these factors alongside their risk tolerance and investment horizon.

Outlook and Strategic Implications

Given the strong call option interest, rising delivery volumes, and technical strength, Bajaj Auto Ltd. appears well-positioned to sustain its upward momentum in the near term. The stock’s proximity to its 52-week high and consistent gains over recent sessions reinforce the bullish narrative.

For investors seeking exposure to the automobile sector, Bajaj Auto offers a blend of large-cap stability and growth potential. The active call option market provides opportunities for strategic positioning, whether through outright purchase of shares or derivatives-based trades to capitalise on anticipated price movements.

Market participants should continue to monitor open interest trends, strike price concentrations, and expiry cycles to gauge evolving investor sentiment and adjust their strategies accordingly.

Conclusion

Bajaj Auto Ltd.’s recent surge in call option trading activity, combined with solid price performance and improving technical indicators, signals growing investor confidence in the stock’s prospects. While the Mojo Grade remains a cautious 'Hold', the upgrade from 'Sell' and the stock’s strong relative performance within the automobile sector suggest a positive trajectory ahead.

Investors are advised to consider both the opportunities and risks inherent in the current market environment, leveraging detailed analysis and market data to inform their decisions.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →