Coal India Ltd Sees Surge in Call Option Activity Ahead of February Expiry

Robust Call Option Activity Highlights Investor Optimism

The call option with a strike price of ₹420, expiring on 24 February 2026, recorded an impressive 10,370 contracts traded, generating a turnover of ₹639.78 lakhs. This level of activity is notable given the underlying stock price of ₹419.7, indicating that traders are betting on the stock crossing the ₹420 threshold within the near term. Open interest stands at 3,839 contracts, suggesting sustained interest and potential for further price movement as expiry approaches.

This surge in call option volume is a clear signal of bullish positioning, as investors seek leveraged exposure to Coal India Ltd.’s anticipated price appreciation. The strike price chosen closely aligns with the current market price, underscoring confidence in a near-term breakout.

Stock Performance and Technical Indicators Support Positive Outlook

On 16 February 2026, Coal India Ltd. outperformed its Minerals & Mining sector by 1.2%, registering a daily gain of 2.9% compared to the sector’s 1.45% and the Sensex’s modest 0.22% rise. The stock touched an intraday high of ₹420.8, marking a 2.9% increase from the previous close and signalling a potential trend reversal after five consecutive days of decline.

Technically, the stock trades above its 50-day, 100-day, and 200-day moving averages, which typically indicates a medium to long-term bullish trend. However, it remains below the 5-day and 20-day moving averages, suggesting some short-term consolidation or resistance. This mixed technical picture may explain the heightened options activity as traders position for a breakout above these shorter-term averages.

Investor participation has also risen sharply, with delivery volumes reaching 38.39 lakhs on 13 February, a 40.26% increase over the five-day average. This uptick in delivery volume confirms genuine buying interest rather than speculative trading, reinforcing the bullish case.

Fundamental Metrics and Market Capitalisation Context

Coal India Ltd. is a large-cap stock with a market capitalisation of ₹2,57,017 crores, placing it among the heavyweight constituents of the Minerals & Mining sector. Despite a recent downgrade from a Buy to a Hold rating by MarketsMOJO on 11 February 2026, the stock maintains a respectable Mojo Score of 67.0, reflecting a balanced outlook based on its fundamentals and technicals.

The downgrade was influenced by a cautious stance on near-term earnings growth and sector headwinds, yet the stock’s high dividend yield of 5.12% at current prices continues to attract income-focused investors. This yield is notably attractive in the current interest rate environment, providing a cushion against volatility.

Liquidity and Trading Dynamics

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹5.32 crores based on 2% of the five-day average traded value. This ensures that institutional and retail investors can execute sizeable trades without significant market impact, a factor that likely contributes to the active options market.

The combination of strong liquidity, rising delivery volumes, and active call option trading paints a picture of a stock that is firmly on the radar of market participants seeking both capital appreciation and income.

Expiry Patterns and Strategic Positioning

The expiry date of 24 February 2026 is just over a week away, intensifying the focus on the ₹420 strike price. The concentration of call options at this strike suggests that traders expect the stock to breach this level imminently, potentially triggering further momentum into the expiry week.

Such positioning often precedes volatility spikes as traders adjust their hedges and speculative bets. Investors should monitor open interest changes closely, as any sharp unwinding or addition of positions could signal shifts in market sentiment.

Investor Takeaways and Outlook

Coal India Ltd.’s recent price action and options market activity suggest a cautiously optimistic outlook. The stock’s ability to outperform its sector and the broader market, combined with rising delivery volumes and strong liquidity, supports the case for a potential near-term rally.

However, the recent downgrade to a Hold rating and the mixed signals from short-term moving averages counsel prudence. Investors should weigh the attractive dividend yield and large-cap stability against the possibility of short-term consolidation or sector-specific challenges.

Options traders appear to be positioning for a breakout above ₹420, which, if realised, could trigger further gains. Monitoring open interest and volume trends in the coming days will be critical to gauge the sustainability of this momentum.

Overall, Coal India Ltd. remains a key stock to watch within the Minerals & Mining sector, with its active call option market providing valuable insights into investor sentiment and potential price trajectories.

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