Larsen & Toubro Ltd Sees Robust Call Option Activity Amid Bullish Market Sentiment

Robust Call Option Volumes Highlight Investor Optimism

On 2 February 2026, Larsen & Toubro Ltd. emerged as one of the most actively traded stocks in the call options segment. The strike price of ₹4,000 saw the highest number of contracts traded, with 8,610 contracts exchanging hands, generating a turnover of approximately ₹808.5 lakhs. This was closely followed by the ₹3,900 strike, which recorded 7,801 contracts traded and a turnover of ₹1,355.3 lakhs. The underlying stock price stood at ₹3,912.9, indicating that the ₹4,000 strike is slightly out-of-the-money, while the ₹3,900 strike is near-the-money.

Open interest data further corroborates the bullish positioning, with the ₹4,000 call option exhibiting an open interest of 5,735 contracts, nearly double that of the ₹3,900 strike’s 2,891 contracts. This concentration of open interest at higher strike prices suggests that traders are positioning for a potential upward move in LT’s share price before the February expiry.

Stock Performance and Technical Indicators Support Positive Outlook

Larsen & Toubro’s stock price has demonstrated resilience, outperforming its sector by 1.07% on the day and registering a 2.95% gain compared to the Sensex’s modest 0.22% rise. The stock reversed a two-day decline, touching an intraday high of ₹3,930.8, a 3.06% increase from the previous close. This rebound is supported by rising investor participation, with delivery volumes on 30 January reaching 16.64 lakh shares, an 11.09% increase over the five-day average.

From a technical perspective, LT’s price is trading above its 5-day, 100-day, and 200-day moving averages, signalling underlying strength. However, it remains below the 20-day and 50-day moving averages, indicating some near-term resistance. This mixed technical picture suggests cautious optimism among traders, who may be using call options to leverage potential gains while managing risk.

Fundamental Strength Underpins Positive Market Sentiment

Larsen & Toubro Ltd. is a dominant player in the construction industry with a market capitalisation of ₹5,24,521 crores, categorising it firmly as a large-cap stock. The company’s recent upgrade in MarketsMOJO’s mojo grade from Hold to Buy on 8 January 2026, with a mojo score of 71.0, reflects improved fundamentals and positive earnings prospects. The market cap grade of 1 further emphasises LT’s stature as a blue-chip stock with strong institutional backing.

Such fundamental strength often attracts options traders who seek to capitalise on anticipated price movements while limiting downside risk. The elevated call option activity at strike prices above the current market level suggests that investors are positioning for a potential breakout, possibly driven by upcoming order inflows, project awards, or favourable macroeconomic conditions supporting infrastructure development.

Expiry Patterns and Strategic Positioning

The 24 February 2026 expiry date is a focal point for options traders, with significant open interest and turnover concentrated in call options. This expiry falls within the quarterly cycle, a period typically marked by increased volatility and strategic repositioning by institutional investors. The clustering of open interest at ₹4,000 strike price indicates a consensus target level, which, if breached, could trigger accelerated buying and further price appreciation.

Moreover, the liquidity profile of LT supports sizeable trades, with the stock’s average traded value allowing for trade sizes up to ₹22.9 crores based on 2% of the five-day average. This liquidity ensures that options positions can be entered and exited efficiently, encouraging active participation from both retail and institutional investors.

Balancing Bullishness with Market Realities

While the surge in call option activity and positive price action point to a bullish outlook, investors should remain mindful of potential headwinds. The stock’s position below the 20-day and 50-day moving averages indicates resistance levels that may cap near-term gains. Additionally, macroeconomic factors such as interest rate movements, commodity price fluctuations, and government policy changes could impact the construction sector’s momentum.

Nevertheless, the combination of strong fundamentals, improved mojo grade, and active options market participation suggests that Larsen & Toubro Ltd. remains a favoured pick among large-cap stocks for investors seeking exposure to India’s infrastructure growth story.

Conclusion: Strategic Opportunities in LT Call Options

In summary, Larsen & Toubro Ltd.’s recent call option activity reveals a clear bullish bias among market participants, with significant volumes and open interest concentrated at ₹3,900 and ₹4,000 strike prices ahead of the 24 February expiry. The stock’s solid fundamentals, coupled with technical signals and rising investor participation, underpin this optimism.

For investors and traders, these developments highlight strategic opportunities to leverage call options for potential upside while managing risk. Monitoring price action around key moving averages and expiry dynamics will be crucial in navigating the near-term market environment for LT.

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