Hindustan Zinc Sees Robust Call Option Activity Ahead of December Expiry

Overview of Call Option Activity

Data from recent trading sessions reveals that Hindustan Zinc’s call options are attracting considerable attention, particularly for contracts expiring on 30 December 2025. The underlying stock price currently stands at ₹630.9, with multiple strike prices clustered around this level showing heavy volumes and turnover.

The most actively traded call options include strikes at ₹620, ₹625, ₹630, and ₹640. Among these, the ₹630 strike price recorded the highest number of contracts traded at 14,168, accompanied by an open interest of 7,125 contracts. This suggests a strong interest in this strike, which is closely aligned with the current underlying price, indicating a focus on near-the-money options.

Other notable strikes include ₹620 with 9,951 contracts traded and ₹625 with 8,943 contracts. The turnover for these strikes is substantial, with ₹620 strike options generating a turnover of approximately ₹1336.02 lakhs and ₹625 strike options around ₹978.30 lakhs. The ₹640 strike, slightly out-of-the-money, also attracted 7,621 contracts with a turnover of ₹446.25 lakhs, reflecting a degree of bullish positioning extending beyond the current price.

Expiry Patterns and Market Implications

The concentration of call option activity around the 30 December expiry date indicates that market participants are positioning themselves ahead of the year-end. This expiry is critical as it often coincides with portfolio rebalancing and strategic adjustments by institutional investors.

Open interest figures reinforce the significance of these strike prices. The ₹630 strike’s open interest of 7,125 contracts is particularly noteworthy, suggesting that traders are either holding onto existing positions or building new ones with expectations of price movement near or above this level. The ₹625 and ₹620 strikes also maintain open interest levels of 1,958 and 1,887 contracts respectively, underscoring sustained interest in these price points.

Stock Price Performance and Sector Context

Hindustan Zinc’s stock price has demonstrated resilience in recent sessions. The stock touched a new 52-week high of ₹627.5 during intraday trading, marking a 2.9% rise on the day. Over the last three consecutive trading days, the stock has delivered a cumulative return of 6.46%, reflecting sustained buying interest.

Despite this, the stock underperformed its sector on the day by 0.71%, with the Non-Ferrous Metals sector gaining 2.94%. The sector’s broader strength is indicative of positive sentiment towards metal stocks, although Hindustan Zinc’s relative performance suggests some profit-taking or consolidation near recent highs.

Technical indicators support the stock’s upward momentum, as it is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This alignment across multiple timeframes typically signals a bullish trend, which may be influencing the active call option positioning.

Liquidity and Investor Participation

Liquidity metrics for Hindustan Zinc remain robust, with the stock’s trading volume supporting sizeable trade sizes. Based on 2% of the 5-day average traded value, the stock can accommodate trade sizes of approximately ₹16.38 crores, making it accessible for institutional and retail investors alike.

However, delivery volumes have shown a decline, with 37.22 lakh shares delivered on 23 December representing an 11.42% reduction compared to the 5-day average. This dip in investor participation could indicate a cautious stance among some market participants despite the stock’s recent gains.

Options Market Sentiment and Bullish Positioning

The concentration of call option trades at and slightly above the current stock price suggests a predominantly bullish sentiment among traders. The high turnover and open interest at the ₹630 strike price, which is near the underlying value, imply expectations of the stock maintaining or surpassing this level by expiry.

Additionally, the active trading at the ₹640 strike, which is out-of-the-money, points to some speculative bets on further upside potential. This pattern is consistent with traders positioning for a positive price movement in the near term, possibly driven by sectoral tailwinds or company-specific developments.

Given Hindustan Zinc’s market capitalisation of ₹2,66,342.98 crores, it remains a significant large-cap player within the Non-Ferrous Metals industry. Its performance and derivatives activity often serve as a barometer for investor sentiment in this sector.

Outlook and Investor Considerations

As the 30 December expiry approaches, the active call option interest in Hindustan Zinc is likely to remain a key focus for market participants. The clustering of strike prices around the current stock value, combined with substantial open interest, suggests that traders are positioning for potential price stability or upside in the near term.

Investors should monitor the evolving open interest and volume patterns, as shifts could indicate changing market expectations. Furthermore, the stock’s performance relative to the broader Non-Ferrous Metals sector and the Sensex will provide additional context for its near-term trajectory.

While the stock has demonstrated strength, the recent dip in delivery volumes signals a degree of caution among some investors. This mixed picture underscores the importance of a balanced approach when analysing Hindustan Zinc’s market activity and derivatives positioning.

Overall, the derivatives market data offers valuable insights into trader sentiment, highlighting a predominantly bullish stance with a focus on strike prices near the current market level. This information can assist investors in making informed decisions as the expiry date draws near.

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