Call Option Activity Highlights
The most active call option for Hindustan Unilever Ltd is the 2,500 strike price expiring on 24 February 2026. On 12 February 2026, a substantial 16,383 contracts were traded, generating a turnover of approximately ₹1,321.6 lakhs. Open interest stands at 3,875 contracts, indicating sustained interest in bullish bets at this strike level. The underlying stock price closed at ₹2,425.8, hovering below the 2,500 strike, suggesting that traders are positioning for a potential rebound or volatility-driven price movement above this level before expiry.
Stock Performance and Market Context
On the day of analysis, Hindustan Unilever underperformed its sector by 0.43%, with a 1-day return of -1.73% compared to the FMCG sector’s -0.90% and the Sensex’s -0.36%. The stock touched an intraday low of ₹2,391.2, marking a 2.91% decline, breaking a four-day streak of consecutive gains. Despite this setback, the stock remains above its key moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), which could provide technical support in the near term.
Investor participation appears to be waning slightly, with delivery volume on 11 February falling by 2.05% to 7.44 lakh shares compared to the five-day average. Liquidity remains adequate, with the stock capable of handling trade sizes up to ₹6.29 crore based on 2% of the five-day average traded value, ensuring that option market activity is supported by sufficient underlying stock liquidity.
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Mojo Score and Rating Implications
Hindustan Unilever’s mojo score currently stands at 48.0, reflecting a Sell rating, downgraded from Hold on 3 December 2025. This downgrade signals a deterioration in the company’s fundamental and technical outlook as assessed by MarketsMOJO’s proprietary scoring system. The market cap grade is 1, indicating a large-cap status with significant market presence but limited upside potential under current conditions.
The downgrade aligns with the recent price weakness and subdued investor participation, suggesting caution among market participants. However, the heavy call option activity at the 2,500 strike price may indicate that some traders are anticipating a recovery or are hedging against volatility, creating a nuanced picture of market sentiment.
Expiry Patterns and Strike Price Significance
The 24 February 2026 expiry is attracting the bulk of call option interest, with the 2,500 strike price serving as a critical level. Given the underlying price of ₹2,425.8, this strike is out-of-the-money but within striking distance, making it an attractive target for bullish traders expecting a rebound in the near term. The open interest of 3,875 contracts at this strike suggests that many investors are either speculating on a price rise or employing strategies such as covered calls or spreads to capitalise on potential volatility.
Such concentrated activity at a single strike price and expiry date often precedes significant price movements, as option writers and buyers adjust their positions. This dynamic can lead to increased gamma and vega exposure, amplifying price swings as expiry approaches.
Sector and Market Comparison
Within the FMCG sector, Hindustan Unilever’s performance has lagged slightly, with the sector index down 0.90% compared to the stock’s 1.73% decline on the day. The broader Sensex has been relatively resilient, falling only 0.36%, underscoring sector-specific pressures possibly related to consumer demand or input cost inflation.
Despite these headwinds, Hindustan Unilever’s large-cap status and diversified product portfolio continue to provide a defensive cushion. The stock’s trading above all major moving averages suggests that longer-term technical support remains intact, even as short-term momentum falters.
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Investor Takeaways and Outlook
For investors, the heavy call option activity at the 2,500 strike price ahead of the 24 February expiry presents both opportunity and risk. The elevated turnover and open interest suggest that market participants are positioning for a potential upside move, possibly anticipating a technical rebound or positive news flow. However, the recent downgrade to a Sell rating and the stock’s underperformance relative to its sector counsel caution.
Traders should monitor the stock’s price action closely in the coming days, especially as it approaches the strike price and expiry date. A sustained move above ₹2,500 could trigger further bullish momentum, validating the call option positioning. Conversely, failure to breach this level may result in premium erosion and increased volatility.
Given the stock’s liquidity and large-cap status, it remains a viable candidate for strategic option plays, including spreads and hedges, to manage risk while seeking upside participation.
Conclusion
Hindustan Unilever Ltd’s current market dynamics reflect a complex interplay between bearish fundamental signals and bullish option market positioning. The significant call option volume at the 2,500 strike price for the 24 February 2026 expiry underscores a cautious optimism among traders, despite the company’s recent downgrade and price weakness. Investors should weigh these factors carefully, considering both technical support levels and broader sector trends before making allocation decisions.
As the expiry date approaches, the stock’s price behaviour around the 2,500 strike will be a key indicator of market sentiment and potential directional bias.
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