Mahindra & Mahindra Ltd Sees Robust Call Option Activity Amid Bullish Market Sentiment

Robust Call Option Volumes Signal Investor Optimism

Data from the derivatives market reveals that call options with strike prices of ₹3,700 and ₹3,800 have attracted the highest trading volumes for M&M ahead of the February expiry. Specifically, the ₹3,700 strike call saw 7,484 contracts traded, generating a turnover of approximately ₹1458.48 lakhs, while the ₹3,800 strike call recorded an even higher volume of 9,227 contracts with a turnover of ₹1021.06 lakhs. The underlying stock price currently stands at ₹3,741, placing these strike prices in close proximity to the money, which often indicates active positioning for potential upside moves.

Open interest figures further corroborate this bullish stance, with 3,127 contracts open at the ₹3,700 strike and 4,767 contracts at ₹3,800. This accumulation of open interest suggests that traders are not only initiating new positions but also holding onto existing ones, anticipating a favourable price movement in the near term.

Stock Performance and Technical Indicators Support Positive Outlook

M&M’s stock price has been on a steady ascent, gaining 4.5% over the past four consecutive trading sessions. On 10 February, the stock closed at ₹3,741, just 2.87% shy of its 52-week high of ₹3,839.90. This performance outpaced the automobile sector’s 1.51% gain and the Sensex’s marginal decline of 0.01% on the same day, highlighting M&M’s relative strength.

Technical analysis reveals that M&M is trading above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained upward momentum. However, it is worth noting that delivery volumes have declined by 22.64% compared to the five-day average, which may indicate some caution among long-term investors despite the bullish derivatives activity.

Market Capitalisation and Mojo Score Reflect Strong Fundamentals

With a market capitalisation of ₹4,64,632.11 crores, M&M remains a heavyweight in the automobile sector. The company’s recent upgrade from a ‘Hold’ to a ‘Buy’ rating by MarketsMOJO on 6 February 2026, accompanied by a Mojo Score of 71.0, underscores improving fundamentals and positive market sentiment. The stock’s market cap grade of 1 further confirms its status as a large-cap stock with solid liquidity and institutional interest.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the ₹3,700 and ₹3,800 strikes for the 24 February expiry suggests that traders are positioning for a potential breakout above the current price level. The higher open interest at ₹3,800 compared to ₹3,700 indicates a stronger conviction that the stock could surpass this level within the next two weeks.

Such expiry patterns often reflect market expectations of near-term catalysts or favourable earnings prospects. Given M&M’s recent performance and sector dynamics, investors appear to be betting on continued momentum, possibly driven by robust demand in the automobile segment and positive macroeconomic indicators.

Sector Comparison and Relative Strength

Within the automobile sector, M&M’s outperformance is notable. While the sector gained 1.51% on 10 February, M&M’s 1.65% gain and four-day cumulative return of 4.5% highlight its leadership among peers. This relative strength is further supported by its trading above all major moving averages, a technical hallmark of sustained bullish trends.

Investors should also consider the broader market context, where the Sensex remained flat, underscoring M&M’s ability to attract buying interest even in a neutral market environment. This resilience enhances its appeal as a large-cap stock with growth potential.

Investor Takeaway and Outlook

The surge in call option volumes and open interest at near-the-money strikes ahead of the February expiry reflects a predominantly bullish sentiment among market participants. M&M’s strong price performance, technical positioning above key moving averages, and recent upgrade to a ‘Buy’ rating by MarketsMOJO provide a compelling case for investors to consider the stock for medium-term appreciation.

However, the decline in delivery volumes suggests some caution among long-term holders, indicating that while short-term momentum is strong, investors should monitor volume trends and broader market conditions closely. The stock’s liquidity, with a trade size capacity of approximately ₹12.54 crores based on recent averages, ensures ease of entry and exit for institutional and retail investors alike.

Overall, Mahindra & Mahindra Ltd stands out as a large-cap automobile stock with robust derivatives market activity, signalling potential upside as expiry approaches. Investors seeking exposure to the sector’s growth story may find this an opportune moment to evaluate their positions in M&M, balancing technical signals with fundamental strengths.

Key Metrics Summary:

• Underlying stock price: ₹3,741.00
• 52-week high: ₹3,839.90 (2.87% away)
• Call option strike prices with highest activity: ₹3,700 and ₹3,800
• Number of contracts traded (₹3,700 strike): 7,484
• Number of contracts traded (₹3,800 strike): 9,227
• Open interest (₹3,700 strike): 3,127 contracts
• Open interest (₹3,800 strike): 4,767 contracts
• Mojo Score: 71.0 (Buy rating, upgraded from Hold on 6 Feb 2026)
• Market cap: ₹4,64,632.11 crores (Large Cap)
• Stock 1-day return: 1.65% vs Sector 1-day return: 1.51%

Investors should continue to monitor the evolving derivatives landscape and stock price action as the 24 February expiry approaches, adjusting their strategies accordingly to capitalise on potential gains or hedge risks.

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