Power Grid Corporation Sees Surge in Call Option Activity Ahead of February Expiry

Robust Call Option Activity Highlights Investor Optimism

On 16 February 2026, POWERGRID emerged as the most active stock in call options, with the 295 strike price call expiring on 24 February attracting significant interest. A total of 8,725 contracts were traded, generating a turnover of ₹648.18 lakhs. Open interest at this strike stands at 2,401 contracts, reflecting sustained investor commitment to bullish bets near the current underlying price of ₹295.85.

This heightened activity suggests that traders are positioning for a potential upside move in the near term, anticipating the stock to hold above or rally beyond the 295 level by expiry. The strike price closely aligns with the stock’s intraday high of ₹296.60 recorded on the same day, reinforcing the market’s confidence in the stock’s immediate strength.

Price Performance and Technical Indicators Support Positive Momentum

POWERGRID’s stock price gained 3.13% on the day, outperforming the power sector’s 1.10% rise and the Sensex’s modest 0.22% advance. This marks a reversal after two consecutive days of decline, signalling renewed buying interest. The stock is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a strong uptrend across multiple timeframes.

However, delivery volumes have declined by 28.09% compared to the five-day average, suggesting that while short-term speculative interest is high, longer-term investor participation has softened. Despite this, the stock’s liquidity remains robust, with a 2% average traded value supporting trade sizes up to ₹8.1 crores, ensuring ease of entry and exit for market participants.

Fundamental and Market Context: A Mixed Picture

Despite the bullish technical signals and active options market, POWERGRID’s fundamental outlook remains cautious. The company holds a large market capitalisation of ₹2,72,647 crores, firmly placing it in the large-cap category. Its dividend yield stands at a healthy 3.1%, which continues to attract income-focused investors.

However, the company’s Mojo Score is a modest 35.0, with a recent downgrade from a Strong Sell to a Sell grade on 31 December 2024. This reflects concerns over valuation, sectoral headwinds, or operational challenges that have tempered analyst enthusiasm. The Market Cap Grade is rated 1, indicating limited upside potential relative to its size and current market conditions.

Investors should weigh these fundamental factors against the technical momentum and options market positioning when considering exposure to POWERGRID.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the 295 strike price for the 24 February expiry is particularly telling. This strike is just below the current market price, suggesting traders expect the stock to maintain or slightly exceed this level in the coming week. The open interest of 2,401 contracts at this strike is significant, indicating a sizeable number of traders holding bullish positions.

Such positioning often precedes a volatility spike as expiry approaches, with traders either exercising options or unwinding positions depending on price movement. The high turnover of ₹648.18 lakhs in call options further underscores the active speculative interest and potential for price swings.

Sectoral and Broader Market Comparison

Within the power sector, POWERGRID’s outperformance by 2.05% relative to peers highlights its relative strength. The sector itself has been consolidating amid regulatory and demand uncertainties, but POWERGRID’s dominant market position as the central transmission utility in India provides a defensive quality that investors favour during volatile periods.

Compared to the Sensex, which posted a marginal gain of 0.22%, POWERGRID’s 3.13% rise is a clear outlier, driven by both technical buying and options market optimism. This divergence may attract further attention from momentum traders and institutional investors seeking alpha in a subdued market environment.

Investor Takeaway: Balancing Bullish Sentiment with Caution

The surge in call option activity at the 295 strike price expiry on 24 February 2026 signals a clear bullish sentiment among traders betting on near-term gains for POWERGRID. The stock’s technical strength, outperformance relative to sector and benchmark indices, and healthy dividend yield provide a compelling case for upside potential.

Nevertheless, the downgrade in Mojo Grade to Sell and the low Market Cap Grade highlight underlying risks that investors must consider. Reduced delivery volumes suggest some hesitancy among long-term holders, while the large market cap may limit rapid price appreciation.

For investors, the current environment presents an opportunity to capitalise on momentum-driven gains while maintaining vigilance on fundamental developments and sector dynamics. Monitoring open interest trends and expiry-related volatility will be crucial in navigating the coming weeks.

Options Market as a Barometer of Sentiment

The options market continues to serve as a valuable barometer for investor expectations. The heavy call option volume and turnover in POWERGRID reflect a tactical positioning that could influence price action near expiry. Traders and portfolio managers should analyse these patterns alongside technical and fundamental indicators to optimise entry and exit points.

Conclusion

Power Grid Corporation of India Ltd’s recent call option activity underscores a growing bullish consensus in the short term, supported by strong price momentum and sector outperformance. However, fundamental caution and recent rating downgrades temper the outlook, suggesting a balanced approach for investors. As expiry approaches, market participants should closely monitor price movements and open interest shifts to capitalise on potential opportunities while managing risk prudently.

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