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

Robust Call Option Volumes Signal Bullish Sentiment

The most active call option for Bajaj Auto Ltd. is centred on the 9,600 strike price, expiring on 27 January 2026. On 23 January 2026, a substantial 12,895 contracts were traded, generating a turnover of approximately ₹33.82 crores. This heightened activity reflects a strong investor inclination towards bullish positioning, as the underlying stock price stood at ₹9,464, just 4.5% shy of its 52-week high of ₹9,888.

Open interest for this strike price remains elevated at 1,839 contracts, indicating sustained interest and potential for further price movement. The concentration of call options at this strike suggests that market participants are anticipating a rally beyond the current price levels in the coming days.

Price Performance and Technical Indicators Support Optimism

Bajaj Auto has outperformed its sector peers, registering a 0.82% gain on the day, compared to a marginal 0.01% increase in the automobile sector and a 0.28% decline in the Sensex. The stock has been on a two-day consecutive gain streak, delivering a cumulative return of 3.08% over this period. Such momentum is further reinforced by the stock trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a strong uptrend.

Despite this positive price action, investor participation has shown signs of moderation. Delivery volume on 22 January 2026 was recorded at 80,230 shares, marking a significant 70.86% decline against the five-day average delivery volume. This divergence suggests that while short-term traders are active, longer-term holders may be adopting a cautious stance.

Mojo Score Upgrade Reflects Improving Fundamentals

Bajaj Auto Ltd. currently holds a Mojo Score of 58.0, categorised as a ‘Hold’ rating, an improvement from its previous ‘Sell’ grade as of 22 December 2025. This upgrade reflects a positive shift in the company’s financial and operational metrics, although the score indicates that investors should maintain a balanced view. The company’s market capitalisation stands at a robust ₹2,62,576 crores, classifying it firmly as a large-cap stock within the automobile sector.

Despite the upgrade, the Mojo Grade remains cautious, signalling that while the stock exhibits potential, investors should weigh the risks carefully, especially given the recent dip in delivery volumes and the proximity to the 52-week high, which may act as a resistance level.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the 9,600 strike price, which is slightly above the current underlying price, suggests that traders are positioning for a breakout. The expiry date of 27 January 2026 is just days away, intensifying the focus on short-term price movements. Such expiry-driven activity often leads to increased volatility, presenting both opportunities and risks for traders.

Given the open interest and turnover figures, it is evident that market participants are not only speculating on price appreciation but also potentially hedging existing positions. The liquidity of the stock, supported by a traded value sufficient to accommodate trades worth ₹7.02 crores based on 2% of the five-day average traded value, ensures that these options can be executed efficiently without significant slippage.

Sectoral and Market Context

The automobile sector has been relatively subdued, with the sector index barely moving on the day. Bajaj Auto’s outperformance by 0.78% against the sector highlights its relative strength. This could be attributed to company-specific factors such as product launches, favourable demand outlook, or positive earnings revisions, which have yet to be fully reflected in the broader sector sentiment.

Moreover, the Sensex’s decline of 0.28% on the same day underscores the defensive nature of Bajaj Auto’s recent gains. Investors seeking exposure to quality large caps with solid momentum may find Bajaj Auto’s current positioning attractive, especially given its technical strength and improving fundamental outlook.

Investor Takeaway and Outlook

In summary, Bajaj Auto Ltd.’s recent surge in call option activity, combined with its technical outperformance and upgraded fundamental rating, paints a cautiously optimistic picture for investors. The proximity to the 52-week high and the concentration of call options at the 9,600 strike price suggest that the market is pricing in a potential upside breakout in the near term.

However, the sharp decline in delivery volumes signals that some investors may be taking profits or adopting a wait-and-watch approach. This mixed signal warrants a balanced investment strategy, where traders may consider leveraging options for tactical exposure while long-term investors monitor fundamental developments closely.

Given the stock’s liquidity and active options market, Bajaj Auto remains a key focus for market participants looking to capitalise on sectoral momentum and company-specific catalysts in the automobile space.

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