Hindustan Zinc Ltd Sees Surge in Call Option Activity Amid Bearish Price Action

Recent Price Performance and Market Context

Hindustan Zinc Ltd, a key player in the Non-Ferrous Metals sector, has been under pressure over the past two sessions, shedding approximately 20.18% cumulatively. On 1 February 2026, the stock opened sharply lower by 8.51% and touched an intraday low of ₹543.55, marking a 13.52% drop from the previous close. This decline aligns with the broader sector trend, where the Non-Ferrous Metals index fell by 8.94%, reflecting subdued investor sentiment amid global commodity price fluctuations and macroeconomic concerns.

Despite the recent weakness, the stock remains above its 100-day and 200-day moving averages, suggesting some underlying long-term support. However, it trades below its 5-day, 20-day, and 50-day averages, indicating short-term bearish momentum. Investor participation has notably increased, with delivery volumes rising by 40.64% on 30 January 2026 compared to the five-day average, signalling active trading interest amid the volatility.

Call Option Activity Highlights Bullish Sentiment

Options market data reveals significant call option activity concentrated around the 24 February 2026 expiry. The most actively traded call options for Hindustan Zinc Ltd are clustered at strike prices of ₹600, ₹650, and ₹700, all above the current underlying price of ₹570.35. This pattern suggests that traders are positioning for a potential upside move over the coming weeks.

The ₹600 strike call options saw the highest volume with 11,491 contracts traded, generating a turnover of ₹3,326.27 lakhs and an open interest of 1,821 contracts. This indicates strong speculative interest close to the money, as the strike is just ₹29.65 above the current price.

Meanwhile, the ₹650 strike calls recorded 6,814 contracts traded with a turnover of ₹924.03 lakhs and an open interest of 3,118 contracts. The ₹700 strike calls, further out of the money, attracted 8,611 contracts with a turnover of ₹589.66 lakhs and a substantial open interest of 6,661 contracts, reflecting bullish bets on a more pronounced rally.

Implications of Elevated Open Interest and Turnover

The open interest figures at the ₹650 and ₹700 strikes are particularly noteworthy. The ₹700 strike’s open interest of 6,661 contracts is nearly double that of the ₹600 strike, indicating that traders are increasingly betting on a substantial price appreciation well above the current levels. This could be driven by expectations of improved earnings, favourable commodity price movements, or strategic corporate developments.

Turnover data corroborates this bullish stance, with the ₹600 strike calls commanding the largest turnover, suggesting active buying and selling around this near-the-money level. The weighted average price of traded volumes leaning closer to the stock’s intraday lows may imply that some investors are accumulating positions at depressed prices, anticipating a recovery.

Fundamental and Technical Ratings Support Positive Outlook

Hindustan Zinc Ltd’s MarketsMOJO score stands at a robust 71.0, reflecting a positive fundamental and technical outlook. The company’s mojo grade was upgraded from Hold to Buy on 9 October 2025, signalling improved confidence in its growth prospects and valuation metrics. Despite the recent price correction, the stock’s large market capitalisation of ₹2,41,582.61 crores and its leadership position in the Non-Ferrous Metals industry underpin its investment appeal.

From a technical perspective, the stock’s ability to hold above its longer-term moving averages suggests that the recent sell-off may be a temporary correction within a broader uptrend. The increased liquidity, with a trading capacity of nearly ₹59 crore based on recent volumes, ensures that investors can enter or exit positions without significant price impact.

Expiry Patterns and Investor Positioning

The concentration of call option activity around the 24 February 2026 expiry date suggests that market participants are focusing on near-term catalysts. This expiry is less than a month away, indicating that traders expect meaningful price movement within this timeframe. The clustering of strike prices above the current market price reflects a predominantly bullish sentiment, with investors willing to pay premiums for the right to buy shares at higher levels.

Such positioning could be motivated by expectations of a rebound in zinc prices, improved operational efficiencies, or positive quarterly results. However, the recent sharp decline and the stock’s underperformance relative to its short-term moving averages caution that risks remain, and the market may be pricing in near-term uncertainties.

Balancing Risks and Opportunities

While the surge in call option volumes and open interest points to optimism, investors should weigh this against the stock’s recent volatility and sector headwinds. The Non-Ferrous Metals sector is sensitive to global economic cycles, currency fluctuations, and commodity demand-supply dynamics. Hindustan Zinc Ltd’s strong fundamentals and upgraded mojo grade provide a solid foundation, but the near-term price action suggests a cautious approach may be warranted.

Investors looking to capitalise on the current option market activity should monitor upcoming corporate announcements, zinc price trends, and broader market sentiment closely. The elevated liquidity and active options market offer opportunities for strategic positioning, but also require vigilance given the potential for rapid price swings.

Conclusion

Hindustan Zinc Ltd’s options market activity reveals a compelling narrative of bullish anticipation amid a backdrop of recent price weakness. The heavy trading in call options at strikes of ₹600, ₹650, and ₹700 for the 24 February 2026 expiry underscores investor expectations of a recovery or significant upside in the near term. Supported by a strong mojo score upgrade and solid market capitalisation, the stock remains a focal point for traders and investors in the Non-Ferrous Metals sector.

However, the recent sharp declines and sector-wide pressures highlight the importance of a balanced investment approach. Monitoring open interest trends, expiry dynamics, and fundamental developments will be key to navigating the evolving landscape around Hindustan Zinc Ltd.

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