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

Robust Call Option Activity Highlights Bullish Positioning

The call options for Bharat Electronics Ltd expiring on 24 February 2026 have witnessed exceptional trading volumes, with 11,301 contracts changing hands on the day. This activity generated a turnover of approximately ₹504.05 lakhs, underscoring significant investor interest in the stock’s near-term upside potential. The most active strike price was ₹450, which is slightly above the current underlying value of ₹444.0, indicating a moderately optimistic outlook among traders.

Open interest at this strike stands at 8,341 contracts, reflecting sustained interest and potential for further price movement as expiry approaches. The concentration of activity at the ₹450 strike suggests that investors are anticipating a breakout above this level, which would mark a new high for the stock in the near term.

Underlying Stock Performance Supports Positive Sentiment

Bharat Electronics Ltd closed the day with a gain of 1.79%, outperforming the Sensex’s modest 0.55% rise and slightly edging past the Aerospace & Defense sector’s 1.77% gain. The stock touched an intraday high of ₹445.4, a 2.31% increase from the previous close, and remains just 4.12% shy of its 52-week high of ₹461.65. This proximity to the yearly peak reinforces the bullish narrative underpinning the call option activity.

Technical indicators further bolster this positive outlook. BEL is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a strong upward trend across multiple timeframes. However, it is worth noting that delivery volumes have declined by 29.01% compared to the 5-day average, suggesting some caution among long-term investors despite the short-term optimism.

Mojo Score Upgrade Reflects Improving Fundamentals

On 17 November 2025, Bharat Electronics Ltd’s Mojo Grade was upgraded from Hold to Buy, with a strong Mojo Score of 78.0. This upgrade reflects improved financial metrics and a positive outlook on the company’s growth prospects within the Aerospace & Defense sector. The company’s market capitalisation stands at a substantial ₹3,22,909 crores, categorising it firmly as a large-cap stock with considerable institutional interest.

The Market Cap Grade of 1 further emphasises BEL’s stature as a heavyweight in its industry, providing investors with confidence in its liquidity and stability. The stock’s liquidity profile supports sizeable trade volumes, with the ability to handle trade sizes up to ₹12.21 crores based on 2% of the 5-day average traded value, making it an attractive option for both retail and institutional traders.

Expiry Patterns and Strategic Implications

The concentration of call option activity at the ₹450 strike price for the 24 February expiry suggests that traders are positioning for a potential breakout in the coming days. This strike is strategically placed just above the current market price, offering a balance between risk and reward for bullish investors. The sizeable open interest indicates that many market participants are either initiating new positions or rolling over existing ones to maintain exposure.

Given the stock’s proximity to its 52-week high and the positive technical momentum, the market consensus appears to favour further gains. However, the decline in delivery volumes signals that some investors may be cautious about committing to long-term holdings, possibly awaiting confirmation of sustained upward movement before increasing their exposure.

Comparative Sector and Market Context

Within the Aerospace & Defense sector, Bharat Electronics Ltd’s performance stands out as it outpaces the sector’s 1.77% daily return and significantly outperforms the broader Sensex index’s 0.55% gain. This relative strength is a key factor driving the heightened call option activity, as investors seek to capitalise on BEL’s momentum amid a sector that is generally viewed as defensive and stable.

Furthermore, the company’s strong fundamentals, reflected in its upgraded Mojo Grade and robust market capitalisation, provide a solid foundation for sustained growth. The combination of technical strength, positive analyst sentiment, and active derivatives market positioning makes BEL a focal point for traders and investors alike in the current market environment.

Risks and Considerations

Despite the bullish signals, investors should remain mindful of potential volatility around the expiry date. The concentration of open interest at a single strike price can sometimes lead to sharp price movements as traders adjust or unwind positions. Additionally, the recent dip in delivery volumes may indicate some hesitancy among long-term holders, which could temper gains if broader market conditions deteriorate.

It is also important to monitor sector-specific developments and geopolitical factors that could impact the Aerospace & Defense industry, as these could influence BEL’s stock performance and option pricing dynamics in the near term.

Outlook

Overall, the surge in call option activity for Bharat Electronics Ltd ahead of the 24 February expiry reflects a growing consensus of bullishness among market participants. Supported by strong technicals, an upgraded Mojo Grade, and a market cap befitting a large-cap leader, BEL appears well-positioned for further gains in the short to medium term. Investors and traders should continue to monitor open interest trends, delivery volumes, and sector developments to gauge the sustainability of this momentum.

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