Eternal Ltd Sees Surge in Call Option Activity Ahead of February Expiry

Robust Call Option Activity Highlights Market Optimism

On 10 February 2026, Eternal Ltd emerged as the most active stock in call options, with 5,387 contracts traded for the 24 February expiry at the ₹300 strike price. This activity generated a turnover of approximately ₹717.18 lakhs, reflecting significant investor interest in leveraged bullish bets. The open interest stood at 5,299 contracts, indicating sustained positions rather than short-term speculative trades.

The underlying stock price was ₹295.65 at the time, just shy of the ₹300 strike, suggesting that traders are positioning for a potential breakout above this psychologically important level within the next two weeks. The concentration of call options at this strike price underscores expectations of upward momentum, despite the stock currently trading below its 100-day moving average.

Price Performance and Technical Context

Eternal Ltd has outperformed its sector by 2.06% on the day, registering a 2.13% gain compared to the sector’s 0.50% and the Sensex’s 0.32%. The stock has recorded consecutive gains over the past two sessions, delivering a cumulative return of 3.97% during this period. Intraday, it touched a high of ₹295.40, up 2.27% from the previous close.

Technically, the stock is trading above its 5-day, 20-day, 50-day, and 200-day moving averages, signalling short- to long-term strength. However, it remains below the 100-day moving average, which may act as a resistance level in the near term. This mixed technical picture could explain the cautious optimism reflected in the options market, where traders are selectively betting on a breakout.

Investor participation, however, has shown signs of moderation. Delivery volume on 9 February was 1.14 crore shares, down sharply by 60.07% compared to the five-day average, indicating a decline in committed buying interest. Despite this, liquidity remains adequate, with the stock’s traded value supporting sizeable trades up to ₹26.33 crore based on 2% of the five-day average traded value.

Fundamental Assessment and Market Sentiment

From a fundamental perspective, Eternal Ltd holds a large market capitalisation of ₹2,78,750 crore, positioning it as a heavyweight in the E-Retail/E-Commerce sector. However, its current Mojo Score of 37.0 and a Mojo Grade of Sell, downgraded from Hold on 23 October 2025, reflect underlying concerns about the company’s near-term prospects and valuation metrics. The Market Cap Grade is rated at 1, indicating limited upside potential relative to its size.

Despite these cautionary signals, the surge in call option activity suggests that market participants are anticipating a positive catalyst or a technical rebound. This divergence between fundamental ratings and market positioning is not uncommon in volatile sectors like E-Retail, where rapid shifts in consumer behaviour and competitive dynamics can quickly alter outlooks.

Expiry Patterns and Strategic Implications

The 24 February 2026 expiry date is attracting the bulk of call option interest, with the ₹300 strike price serving as a focal point for bullish bets. This expiry is less than two weeks away, which implies that traders expect a near-term price movement sufficient to push Eternal Ltd above this level. The open interest concentration at this strike also suggests that option writers may be hedging or adjusting positions in anticipation of increased volatility.

Given the stock’s recent price momentum and technical positioning, a successful breach of the ₹300 mark could trigger further upside, potentially attracting fresh buying from both retail and institutional investors. Conversely, failure to surpass this level before expiry could lead to a rapid unwinding of call positions, resulting in increased volatility and possible price retracement.

Comparative Sector and Market Context

Within the broader E-Retail/E-Commerce sector, Eternal Ltd’s performance stands out, having outpaced sector returns by over 1.5 percentage points on the day. This relative strength is notable given the sector’s mixed performance amid ongoing macroeconomic uncertainties and evolving consumer trends. The Sensex’s modest gain of 0.32% further highlights Eternal’s outperformance.

However, the company’s downgrade to a Sell rating by MarketsMOJO and its low Mojo Score indicate that caution remains warranted. Investors should weigh the technical bullish signals against fundamental headwinds, including competitive pressures and valuation concerns.

Investor Takeaway and Outlook

For investors and traders, the heightened call option activity in Eternal Ltd offers a window into market expectations of a near-term price rally. The ₹300 strike price acts as a critical threshold, with the potential to unlock further gains if breached convincingly before expiry. However, the company’s fundamental ratings and recent downgrade counsel prudence, suggesting that any bullish positioning should be balanced with risk management strategies.

Market participants should monitor price action around the 100-day moving average and watch for changes in delivery volumes and open interest to gauge the sustainability of the current momentum. Given the stock’s liquidity profile, sizeable trades can be executed without significant market impact, which may encourage institutional participation if positive catalysts emerge.

In summary, Eternal Ltd presents a complex picture where technical optimism and options market positioning contrast with cautious fundamental assessments. This dynamic underscores the importance of a multi-faceted approach to investment decisions in the evolving E-Retail sector.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →