Power Grid Corporation Sees Surge in Call Option Activity Amid Bullish Momentum

Robust Call Option Activity Highlights Investor Optimism

On 2 February 2026, POWERGRID emerged as the most actively traded stock in call options, with the 260 strike price call contracts dominating volumes. A total of 14,541 contracts exchanged hands, generating a turnover of approximately ₹1,469.8 lakhs. Open interest stood at 2,292 contracts, underscoring sustained investor interest in bullish bets ahead of the February expiry.

The underlying stock price closed at ₹267.25, comfortably above the 260 strike, indicating that traders are positioning for further upside. The weighted average price of traded options skewed towards the lower end of the price range, suggesting that buyers are seeking value while maintaining a positive outlook.

Price Performance and Technical Indicators

POWERGRID’s stock price demonstrated resilience, touching an intraday high of ₹269.5, marking a 7.22% gain on the day. This performance outpaced the power sector’s 1.94% gain and the Sensex’s modest 0.52% rise, reflecting strong relative strength. The stock reversed a two-day decline, signalling a potential trend reversal supported by increased investor participation.

Technical analysis reveals that the stock is trading above its 5-day, 20-day, and 50-day moving averages, though it remains below the longer-term 100-day and 200-day averages. This mixed technical picture suggests a medium-term consolidation phase, with short-term momentum favouring buyers.

Delivery volumes have surged, with 1.72 crore shares delivered on 30 January 2026, a 27.75% increase over the five-day average. This rise in delivery volume indicates genuine buying interest rather than speculative trading, reinforcing the bullish sentiment.

Fundamental Context and Market Capitalisation

Power Grid Corporation of India Ltd is a large-cap stock with a market capitalisation of ₹2,36,793 crore, operating within the power industry. Despite its size, the company currently holds a Mojo Score of 30.0 and a Mojo Grade of Sell, upgraded from a previous Strong Sell rating on 31 December 2024. This cautious fundamental grading contrasts with the bullish options activity, suggesting that traders may be anticipating a turnaround or short-term rally despite underlying challenges.

The stock offers a dividend yield of 3.55%, which remains attractive for income-focused investors amid volatile market conditions. Liquidity metrics indicate that the stock is sufficiently liquid to support sizeable trades, with a 2% threshold of the five-day average traded value allowing for trade sizes up to ₹9.85 crore without significant market impact.

Expiry Patterns and Strategic Positioning

The February 24 expiry date is attracting significant open interest, with traders focusing on the 260 strike price call options. This strike is slightly out-of-the-money relative to the current underlying price, indicating that investors are betting on a moderate price appreciation in the near term. The concentration of contracts at this strike suggests a consensus expectation that POWERGRID will maintain or exceed this level by expiry.

Such positioning often reflects a strategic approach to capitalise on anticipated positive catalysts, such as favourable regulatory developments, improved power sector demand, or better-than-expected quarterly results. The elevated turnover and open interest also imply that institutional players may be actively hedging or speculating on directional moves.

Balancing Bullish Sentiment with Fundamental Caution

While the surge in call option activity and strong intraday gains point to bullish investor sentiment, the underlying fundamental metrics and Mojo Grade suggest caution. The company’s current Sell rating, despite an upgrade from Strong Sell, indicates that challenges remain in operational or financial performance that could temper longer-term upside.

Investors should weigh the technical momentum and options market optimism against these fundamental considerations. The stock’s dividend yield and liquidity profile provide some defensive qualities, but the mixed moving average signals and modest Mojo Score highlight the need for careful monitoring.

Outlook and Investor Takeaways

Power Grid Corporation’s recent market activity underscores a complex interplay between technical optimism and fundamental caution. The pronounced call option volumes at the 260 strike price ahead of the 24 February expiry reflect a bullish consensus on near-term price appreciation. This is supported by strong delivery volumes, a robust intraday rally, and outperformance relative to sector and benchmark indices.

However, the company’s modest Mojo Score and Sell rating highlight ongoing challenges that investors should not overlook. The stock’s position below its longer-term moving averages suggests that any rally may be part of a broader consolidation rather than a sustained uptrend.

For investors, this environment calls for a balanced approach: recognising the potential for short-term gains driven by market sentiment and options positioning, while remaining vigilant about fundamental risks. The attractive dividend yield and liquidity profile add to the stock’s appeal for certain portfolios, but comprehensive due diligence remains essential.

Summary

In summary, Power Grid Corporation of India Ltd is currently a focal point for active call option trading, signalling bullish sentiment among market participants. The stock’s recent price action and delivery volume trends reinforce this optimism, even as fundamental assessments advise caution. Investors should monitor upcoming earnings, sector developments, and technical indicators closely to navigate this nuanced market landscape effectively.

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