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

Robust Call Option Trading Highlights Investor Confidence

On 12 Jan 2026, Coal India Ltd witnessed an impressive surge in call option activity, particularly for the 27 Jan 2026 expiry series. The strike price of ₹430 attracted the highest volume, with 10,853 contracts traded, generating a turnover of approximately ₹1179.45 lakhs. Open interest at this strike stands at 4,699 contracts, underscoring sustained interest and positioning by traders anticipating upward price movement.

The underlying stock closed at ₹430.5, just 1.74% shy of its 52-week high of ₹436.7, reinforcing the rationale behind the bullish call option positioning. This proximity to the peak price level often encourages speculative and hedging activities, as investors seek to capitalise on potential further gains.

Price and Trend Analysis Support Positive Outlook

Coal India Ltd outperformed its sector peers on the day, registering a 2.95% gain compared to the Minerals & Mining sector’s 1.65% rise and the broader Sensex’s decline of 0.45%. The stock’s intraday high touched ₹430.5, marking a 2.9% increase from the previous close. Notably, the stock has reversed its short-term downtrend, gaining after two consecutive days of decline, signalling renewed buying interest.

Technical indicators further bolster the bullish case. Coal India is trading above its key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reflecting a strong upward momentum across multiple timeframes. This alignment of moving averages typically attracts momentum traders and institutional investors alike.

Liquidity and Dividend Yield Enhance Investment Appeal

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹9.19 crores based on 2% of the 5-day average traded value. However, delivery volumes have seen a notable decline, with 37.5 lakh shares delivered on 9 Jan representing a 48.12% drop against the 5-day average delivery volume. This could indicate a shift towards more speculative trading rather than long-term accumulation.

Adding to its attractiveness, Coal India offers a high dividend yield of 6.35% at current prices, appealing to income-focused investors amid volatile markets. This combination of dividend income and capital appreciation potential underpins the stock’s Hold rating by MarketsMOJO, which recently upgraded the grade from Sell to Hold on 22 Dec 2025, reflecting improved fundamentals and market sentiment.

Sector Context and Market Capitalisation

Coal India Ltd operates within the Minerals & Mining sector, a segment that has seen mixed performance amid fluctuating commodity prices and regulatory developments. Despite these challenges, Coal India’s large-cap status with a market capitalisation of ₹2,57,540 crores provides it with a stable foundation and investor confidence. The company’s Mojo Score of 57.0 and a Hold grade reflect a balanced view, acknowledging both growth potential and sector headwinds.

Its recent upgrade from Sell to Hold by MarketsMOJO on 22 Dec 2025 signals a positive shift in operational metrics and market positioning, encouraging investors to reassess their stance on the stock.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the ₹430 strike price for the 27 Jan 2026 expiry is particularly telling. This strike is almost at-the-money, given the underlying’s current price of ₹430.5, indicating that traders expect the stock to maintain or exceed this level in the near term. The high open interest at this strike suggests that many positions remain open, potentially leading to increased volatility as expiry approaches.

Such activity often precedes significant price movements, as traders adjust their positions or exercise options. The sizeable turnover of ₹1179.45 lakhs in call options further highlights the strong speculative interest and hedging strategies being employed.

Investor Positioning and Market Implications

The surge in call option volumes and open interest at near-the-money strikes reflects a predominantly bullish stance among traders. This is consistent with the stock’s recent price strength and technical indicators. However, the decline in delivery volumes suggests that some investors may be favouring short-term speculative trades over long-term holdings.

Market participants should monitor the stock’s price action closely as the 27 Jan expiry approaches, as option expiry dynamics could induce volatility. Additionally, the stock’s dividend yield and improved Mojo Grade provide a cushion for investors seeking a blend of income and capital appreciation.

Overall, Coal India Ltd’s current market behaviour and option activity indicate a cautiously optimistic outlook, with investors positioning for potential upside while remaining mindful of sector risks and broader market conditions.

Conclusion: Balanced Bullish Sentiment with Strategic Caution

Coal India Ltd’s recent call option activity and price performance underscore a growing bullish sentiment among investors, supported by technical strength and fundamental improvements. The stock’s proximity to its 52-week high, combined with a high dividend yield and upgraded Mojo Grade, make it an attractive proposition within the Minerals & Mining sector.

Nevertheless, the mixed signals from declining delivery volumes and the inherent volatility around option expiry warrant a measured approach. Investors should weigh the potential rewards against risks, considering both the company’s fundamentals and broader market trends before making allocation decisions.

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