Central Depository Services Sees Surge in Call Option Activity Amid Bullish Sentiment

Robust Call Option Activity Highlights Bullish Positioning

On 10 February 2026, CDSL emerged as the most active stock in call options, with 6,516 contracts traded for the 24 February expiry at the ₹1,400 strike price. This strike is closely aligned with the underlying stock price, which closed at ₹1,408.70, indicating that traders are positioning for a potential upside move in the near term. The turnover for these call options reached ₹1182.33 lakhs, underscoring significant liquidity and interest in this contract.

Open interest stands at 2,321 contracts, suggesting that many traders are holding onto their bullish bets rather than closing positions. This sustained open interest, combined with heavy trading volume, points to a consensus expectation of upward price momentum in the coming weeks.

Stock Performance and Technical Indicators

CDSL’s stock price gained 2.52% on the day, outperforming the Capital Markets sector, which declined by 0.25%, and the broader Sensex, which rose modestly by 0.32%. The stock currently trades above its 5-day and 20-day moving averages, signalling short-term strength. However, it remains below its 50-day, 100-day, and 200-day moving averages, indicating that medium- to long-term momentum is still under pressure.

Investor participation has shown signs of waning, with delivery volume on 9 February falling sharply by 45.88% to 6.11 lakh shares compared to the 5-day average. This decline in delivery volume suggests that while speculative interest via options is rising, actual shareholding commitment is more cautious.

Mojo Score and Market Capitalisation Context

MarketsMOJO assigns CDSL a Mojo Score of 37.0, categorising it with a Sell grade as of 12 January 2026, a downgrade from its previous Hold rating. The company’s market capitalisation stands at ₹29,448.10 crores, placing it in the small-cap segment within the Capital Markets sector. Its Market Cap Grade is 3, reflecting moderate size relative to peers.

This downgrade reflects concerns over valuation and medium-term growth prospects, despite the recent uptick in price and option activity. Investors should weigh these factors carefully when considering exposure to CDSL.

Expiry Patterns and Strike Price Significance

The 24 February 2026 expiry is attracting the bulk of call option interest, with the ₹1,400 strike price being the focal point. This strike is slightly below the current spot price, which often indicates traders expect the stock to maintain or exceed this level by expiry. The concentration of contracts at this strike suggests a consensus target zone for the near term.

Options traders often use such strike prices to hedge or speculate on directional moves. The high turnover and open interest at this strike imply that market participants are positioning for a potential breakout or sustained rally, despite the stock’s recent technical challenges.

Liquidity and Trading Viability

CDSL’s liquidity remains adequate for sizeable trades, with the stock’s traded value averaging sufficient to support trade sizes up to ₹7.05 crores based on 2% of the 5-day average traded value. This liquidity is crucial for institutional investors and options traders seeking to enter or exit positions without significant price impact.

However, the falling delivery volumes caution that while speculative interest is rising, genuine accumulation by long-term investors is subdued. This divergence between options activity and delivery volumes warrants close monitoring.

Outlook and Investor Considerations

While the surge in call option activity signals bullish sentiment among traders, the overall fundamental and technical backdrop for CDSL remains mixed. The downgrade to a Sell rating by MarketsMOJO reflects concerns over valuation and growth sustainability. Investors should be cautious and consider the stock’s position relative to its moving averages and delivery volume trends.

Options activity can often precede price moves, but it can also reflect speculative positioning that may reverse quickly. Given the stock’s small-cap status and sector dynamics, investors should balance the potential for short-term gains against the risks highlighted by the recent downgrade and technical indicators.

For those considering exposure, monitoring the evolution of open interest and strike price concentrations in upcoming expiries will be critical to gauge market conviction and potential price trajectories.

Sector and Market Context

The Capital Markets sector has been under pressure recently, with many stocks facing headwinds from regulatory changes and macroeconomic uncertainties. CDSL’s outperformance today by 2.61% relative to its sector peers is notable but should be viewed in the context of broader market volatility and sector rotation trends.

Investors looking for exposure to the capital markets space may find more attractive opportunities by comparing CDSL’s fundamentals and technicals with other small- and mid-cap peers, especially given its current Sell grade and moderate Mojo Score.

Summary

In summary, Central Depository Services (India) Ltd is experiencing heightened call option activity ahead of the 24 February 2026 expiry, with the ₹1,400 strike price attracting the most interest. This reflects a bullish stance among options traders despite a recent downgrade to a Sell rating and mixed technical signals. The stock’s outperformance relative to its sector and the Sensex today highlights short-term strength, but falling delivery volumes and its position below key moving averages suggest caution. Investors should carefully weigh these factors and monitor evolving options market data to inform their decisions.

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