L&T Finance Ltd Sees Robust Call Option Activity Amid Bullish Momentum

Robust Call Option Activity Highlights Bullish Sentiment

On 20 January 2026, L&T Finance Ltd emerged as the most active stock in call options, with 5,883 contracts traded at the ₹310 strike price expiring on 27 January 2026. This activity generated a turnover of ₹58.24 crores, reflecting significant investor interest in bullish bets on the stock. The open interest at this strike stands at 2,109 contracts, indicating sustained positioning rather than short-term speculative trades.

The underlying stock price at the time was ₹302.60, making the ₹310 strike a near-the-money call option. Such positioning suggests traders are anticipating a potential upside move beyond this level in the coming week, aligning with the stock’s recent price momentum.

Price Performance and Technical Indicators Support Positive Outlook

L&T Finance Ltd has outperformed its NBFC sector peers by 2.77% on the day, registering a 0.90% gain compared to the sector’s 1.24% decline and the Sensex’s 0.50% fall. The stock has been on a four-day consecutive gain streak, delivering a cumulative return of 5.7% during this period. Intraday, it touched a high of ₹309.40, up 3.12% from the previous close, underscoring strong buying interest.

Technically, the stock is trading above its 5-day, 50-day, 100-day, and 200-day moving averages, though it remains slightly below the 20-day moving average. This pattern indicates a solid medium- to long-term uptrend, with some short-term consolidation. The rising delivery volume of 65.32 lakh shares on 19 January, which surged 121.09% above the five-day average, further confirms heightened investor participation and conviction.

Market Capitalisation and Mojo Score Reflect Mid-Cap Stability

With a market capitalisation of ₹75,139 crore, L&T Finance Ltd is classified as a mid-cap stock within the NBFC sector. Its current Mojo Score stands at 65.0, reflecting a Hold rating, upgraded from a Sell on 14 May 2025. This upgrade signals improving fundamentals and market sentiment, though the stock is yet to achieve a strong buy status. The Market Cap Grade of 2 suggests moderate liquidity and institutional interest, suitable for investors seeking exposure to the NBFC space with balanced risk.

Expiry Patterns and Strike Price Concentration

The concentration of call option contracts at the ₹310 strike price expiring on 27 January 2026 is particularly telling. This expiry is the nearest monthly cycle, and the high volume and open interest suggest that traders are positioning for a potential breakout above this level within the next week. The strike price is just above the current market price, indicating a moderately bullish stance rather than aggressive speculation.

Such activity often precedes significant price moves, as option traders hedge or leverage their positions. The open interest of 2,109 contracts at this strike is substantial relative to the daily traded volume, implying that many investors are holding these positions into expiry rather than closing them out immediately.

Investor Participation and Liquidity Support Active Trading

Liquidity remains a key factor for active trading in both the stock and its derivatives. L&T Finance Ltd’s delivery volume of 65.32 lakh shares on 19 January, more than doubling the five-day average, demonstrates strong investor engagement. The stock’s liquidity supports trade sizes up to ₹6.59 crore based on 2% of the five-day average traded value, making it accessible for institutional and retail traders alike.

This liquidity, combined with the stock’s mid-cap status and improving Mojo Grade, makes it an attractive candidate for options strategies that seek to capitalise on short-term price movements while maintaining exposure to a fundamentally sound NBFC.

Balancing Bullish Momentum with Caution

While the surge in call option activity and recent price gains point to bullish sentiment, investors should remain cautious. The stock’s Mojo Grade remains at Hold, reflecting some reservations about valuation or sector headwinds. The NBFC sector has faced regulatory and credit challenges in recent years, and macroeconomic factors such as interest rate changes and credit demand fluctuations could impact future performance.

Moreover, the stock’s position just below the 20-day moving average suggests potential short-term resistance. Traders should monitor price action closely around the ₹310 level, as a decisive breakout could trigger further gains, while failure to breach this strike may lead to consolidation or pullback.

Outlook and Strategic Considerations for Investors

For investors and traders, L&T Finance Ltd presents an interesting case of a mid-cap NBFC stock with improving fundamentals and growing market interest. The recent upgrade from Sell to Hold on 14 May 2025 and the Mojo Score of 65.0 indicate a stabilising outlook. The active call option interest at near-the-money strikes suggests that market participants are positioning for a positive near-term move.

Options traders might consider strategies such as buying calls at the ₹310 strike or employing spreads to capitalise on expected volatility around the 27 January expiry. Long-term investors should weigh the improving momentum against sector risks and valuation metrics before increasing exposure.

Overall, L&T Finance Ltd’s combination of rising investor participation, strong liquidity, and bullish option positioning makes it a stock to watch closely in the coming weeks.

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