Bharat Electronics Ltd Sees Surge in Call Option Activity Ahead of February Expiry

Robust Call Option Volumes Highlight Investor Optimism

Data from the derivatives market reveals that BEL's call options have attracted substantial interest, with the most active strike prices clustered around ₹430, ₹435, ₹440, ₹450, and ₹460. The highest number of contracts traded was at the ₹450 strike, with 6,053 contracts exchanged, generating a turnover of approximately ₹849.6 lakhs. Close behind was the ₹440 strike, which saw 5,184 contracts traded, amounting to a turnover of ₹972.2 lakhs.

The ₹460 strike price call options, despite being further out-of-the-money relative to the current underlying price of ₹427.6, recorded 3,897 contracts traded and an impressive open interest of 9,329 contracts. This elevated open interest at higher strike prices suggests that market participants are positioning for a potential rally beyond the current price levels.

Meanwhile, the ₹430 and ₹435 strikes also demonstrated strong activity, with 3,746 and 3,287 contracts traded respectively, and open interest figures of 2,802 and 1,373 contracts. The turnover at these strikes was ₹933.1 lakhs and ₹714.8 lakhs respectively, underscoring the liquidity and investor focus on near-the-money call options.

Underlying Stock Performance Supports Bullish Outlook

Bharat Electronics Ltd’s stock price has shown resilience, trading above its 20-day, 50-day, 100-day, and 200-day moving averages, although it remains slightly below the 5-day moving average. On 1 February 2026, the stock recorded a delivery volume of 2.6 crore shares, marking a 44.94% increase compared to the five-day average delivery volume. This heightened investor participation aligns with the increased call option activity, reflecting confidence in the stock’s near-term prospects.

The stock touched an intraday high of ₹438.7 on the same day, representing a 3.14% gain, outperforming the Sensex’s 0.22% rise and closely tracking the Aerospace & Defence sector’s 0.80% gain. BEL’s one-day return stood at 0.59%, signalling steady momentum amid sectoral strength.

Market Cap and Quality Metrics Reinforce Investment Appeal

With a market capitalisation of ₹3,10,629 crore, Bharat Electronics Ltd is firmly positioned as a large-cap stock within the Aerospace & Defence industry. The company’s Mojo Score of 78.0, upgraded from a previous Hold rating to a Buy on 17 November 2025, reflects improved fundamentals and positive market sentiment. The Market Cap Grade of 1 further underscores BEL’s stature as a high-quality, liquid stock suitable for sizeable trades, with an average traded value supporting transactions up to ₹50.67 crore.

Expiry Patterns and Strike Price Distribution Indicate Strategic Positioning

The concentration of call option activity around the 24 February 2026 expiry date suggests that traders are positioning ahead of this key derivatives expiry. The clustering of open interest at strikes above the current market price, especially at ₹450 and ₹460, indicates a strategic bet on a price breakout in the coming weeks.

Open interest at the ₹460 strike stands out with 9,329 contracts, the highest among all strikes, signalling strong speculative interest or hedging activity anticipating a rally beyond ₹460. This is notable given the underlying price of ₹427.6, implying expectations of a 7.7% upside within the expiry timeframe.

Similarly, the ₹450 strike’s open interest of 9,229 contracts reinforces the bullish positioning, with traders likely viewing this level as a key resistance point to be breached. The active trading volumes and turnover figures across these strikes demonstrate robust liquidity, enabling investors to execute sizeable trades with relative ease.

Technical and Fundamental Factors Bolster Positive Sentiment

From a technical perspective, BEL’s price action above multiple moving averages signals a sustained uptrend, supported by rising delivery volumes and sectoral tailwinds. The Aerospace & Defence sector’s steady performance, coupled with BEL’s upgraded Mojo Grade to Buy, provides a strong fundamental backdrop for the observed options market activity.

Investors should note that the day’s price change of -0.18% is marginal and does not detract from the overall bullish momentum indicated by options traders. The slight dip may represent short-term profit-taking or consolidation before a potential breakout.

Implications for Investors and Traders

The pronounced call option activity in Bharat Electronics Ltd ahead of the 24 February expiry offers valuable insights for investors and traders. The elevated open interest and turnover at strikes above the current price suggest a consensus expectation of upward price movement, potentially driven by positive sector developments or company-specific catalysts.

For long-term investors, the upgraded Mojo Grade to Buy and strong fundamental metrics reinforce BEL’s appeal as a core portfolio holding within the Aerospace & Defence space. Traders may consider leveraging the options market to capitalise on anticipated volatility and directional moves, using call options at strikes between ₹440 and ₹460 to participate in potential gains while managing risk.

However, it is prudent to monitor price action closely as expiry approaches, given that options markets can be sensitive to sudden shifts in sentiment or external factors impacting the defence sector. The current liquidity and market depth provide flexibility for strategic entry and exit points.

Conclusion

Bharat Electronics Ltd’s recent surge in call option trading activity, combined with its upgraded investment grade and solid technical positioning, underscores a growing bullish consensus among market participants. The concentration of open interest at higher strike prices ahead of the 24 February 2026 expiry signals expectations of a meaningful price rally in the near term. Investors and traders alike should keep a close watch on BEL’s price movements and sector developments to capitalise on this momentum.

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