Hindustan Zinc Ltd Sees Surge in Call Option Activity Amid Bullish Market Sentiment

Robust Call Option Activity Highlights Investor Optimism

On 2 February 2026, Hindustan Zinc Ltd emerged as one of the most actively traded stocks in the call options segment. The call options with a strike price of ₹600 expiring on 24 February 2026 saw a substantial volume of 4,108 contracts traded, generating a turnover of approximately ₹1,401.5 lakhs. Open interest at this strike stands at 2,574 contracts, indicating sustained interest and potential accumulation by bullish traders.

Given the underlying stock price of ₹578.75, the ₹600 strike represents a modest out-of-the-money position, which investors appear willing to pay a premium for, anticipating a rally beyond this level within the next three weeks. This activity is particularly significant considering the stock’s recent intraday high of ₹591, achieved on the same day, marking a 3.67% gain from previous levels.

Price and Trend Analysis: Signs of a Reversal

Hindustan Zinc’s price performance on the day showed a 1.39% gain, although it slightly underperformed its sector, which rose 2.64%. The stock has reversed its recent two-day decline, signalling a potential short-term trend change. It currently trades above its 100-day and 200-day moving averages, which often act as strong support levels, but remains below the 5-day, 20-day, and 50-day averages, indicating some near-term resistance.

Investor participation has also increased markedly, with delivery volumes on 30 January rising by 38.68% compared to the five-day average, reaching 1.61 crore shares. This heightened activity suggests growing conviction among shareholders and traders alike.

Market Capitalisation and Quality Metrics

Hindustan Zinc Ltd is classified as a large-cap stock with a market capitalisation of ₹2,44,223.44 crores, reflecting its dominant position in the non-ferrous metals industry. The company’s Mojo Score currently stands at 64.0, with a Mojo Grade of Hold, downgraded from Buy as of 1 February 2026. This adjustment reflects a more cautious stance amid recent volatility, although the stock retains a strong market cap grade of 1, indicating robust size and liquidity.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹60.54 crores comfortably, based on 2% of the five-day average traded value. This ensures that institutional investors can enter or exit positions without significant market impact.

Options Expiry and Strike Price Dynamics

The 24 February 2026 expiry date is attracting significant attention, with the ₹600 strike price acting as a focal point for bullish bets. The concentration of open interest at this level suggests that traders expect the stock to breach this threshold within the next three weeks, potentially triggering further upside momentum.

Options traders often use call options to leverage their bullish outlook while limiting downside risk to the premium paid. The high turnover and open interest at this strike price indicate a strong conviction in a near-term rally, possibly driven by favourable industry fundamentals or company-specific catalysts.

Sector Context and Comparative Performance

Within the non-ferrous metals sector, Hindustan Zinc’s performance has been mixed. While the sector gained 2.64% on the day, the stock’s 1.39% rise lagged behind, reflecting some caution among investors. However, the stock’s ability to hold above key long-term moving averages and the rising delivery volumes point to underlying strength.

Investors should also consider the broader market context, with the Sensex posting a modest 0.22% gain. Hindustan Zinc’s relative outperformance over the benchmark in recent sessions, combined with the surge in call option activity, may signal a tactical opportunity for those anticipating a sector rebound.

Investment Implications and Outlook

For investors, the current surge in call option activity on Hindustan Zinc Ltd offers a clear signal of growing bullish sentiment. The stock’s technical positioning above key long-term averages, combined with rising delivery volumes, supports the case for a potential upward breakout beyond the ₹600 level in the near term.

However, the recent downgrade from Buy to Hold by MarketsMOJO on 1 February 2026 advises caution. The stock’s underperformance relative to its sector and the presence of resistance at shorter-term moving averages suggest that investors should monitor price action closely before committing fresh capital.

Given the company’s large-cap status and strong market capitalisation, it remains a core holding for many portfolios within the non-ferrous metals space. The options market activity, however, provides an additional layer of insight into market expectations and can be used to gauge sentiment shifts more dynamically.

Summary

In summary, Hindustan Zinc Ltd’s recent call option volume and open interest data reveal a pronounced bullish tilt among traders, centred on the ₹600 strike expiring in late February. While the stock has shown signs of recovery after a brief dip, investors should weigh the technical signals alongside fundamental considerations and sector trends before making investment decisions.

As always, a balanced approach combining options market intelligence with traditional equity analysis can help investors navigate the evolving landscape of this key non-ferrous metals player.

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