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

Robust Call Option Activity Highlights Investor Optimism

On 3 February 2026, POWERGRID emerged as the most active stock in call options trading, with the 280 strike price call expiring on 24 February 2026 attracting significant attention. A total of 14,417 contracts were traded, generating a turnover of ₹1257.31 lakhs. The open interest for this strike stands at 3,411 contracts, reflecting sustained investor interest ahead of expiry.

The underlying stock price at the time was ₹281.85, slightly above the 280 strike, indicating that traders are positioning for further upside in the near term. This elevated call option activity suggests a predominantly bullish outlook, with market participants anticipating continued gains or at least a consolidation above this key level.

Price Performance and Technical Positioning

POWERGRID has demonstrated strong price momentum, outperforming the Power Generation and Distribution sector by 0.97% on the day. The stock recorded a 4.15% gain, touching an intraday high of ₹282.25, and opened with a gap up of 2.09%. Over the past two trading sessions, the stock has delivered a cumulative return of 12.09%, signalling robust buying interest.

Technically, the stock is trading above its 5-day, 20-day, 50-day, and 100-day moving averages, reinforcing the short- to medium-term bullish trend. However, it remains below the 200-day moving average, indicating that longer-term investors may still be cautious. This mixed technical picture suggests that while momentum is positive, some resistance may be encountered at higher levels.

Sectoral Context and Market Capitalisation

The Power sector has gained 3.07% on the day, with POWERGRID’s outperformance underscoring its relative strength within the industry. The company is a large-cap heavyweight with a market capitalisation of ₹2,59,115 crores, making it a key bellwether for the sector. Its liquidity profile is strong, with a delivery volume of 1.98 crore shares on 2 February, representing a 36.72% increase over the five-day average, and traded value sufficient to support sizeable transactions of up to ₹12.13 crores.

Analyst Ratings and Mojo Score Indicate Caution

Despite the bullish option activity and recent price gains, POWERGRID’s overall analyst sentiment remains cautious. The company holds a Mojo Score of 30.0, categorised as a Sell rating, though this represents an improvement from a previous Strong Sell grade as of 31 December 2024. The Market Cap Grade is 1, reflecting its large-cap status but also signalling limited upside potential according to the current assessment.

This divergence between market optimism in the options market and analyst caution may reflect concerns over valuation, regulatory risks, or sectoral headwinds that could temper longer-term gains. Investors should weigh these factors carefully when considering exposure to POWERGRID.

Dividend Yield and Income Appeal

POWERGRID offers a relatively attractive dividend yield of 3.29% at the current price level, which may appeal to income-focused investors amid the stock’s recent volatility. This yield is competitive within the Power sector and supports the stock’s appeal as a stable, dividend-paying large cap, even as growth prospects remain under scrutiny.

Expiry Patterns and Strike Price Significance

The concentration of call option activity at the 280 strike price, with expiry on 24 February 2026, is particularly noteworthy. This strike is closely aligned with the current underlying price, suggesting that traders are positioning for a breakout or sustained trading above this level in the coming weeks. The sizeable open interest and turnover at this strike indicate that it is a key focal point for market participants, potentially serving as a support or resistance pivot depending on price action.

Expiry dynamics in the near term could lead to increased volatility as traders adjust positions, roll over contracts, or close out profitable trades. Monitoring open interest changes and price movements around this strike will be crucial for gauging the sustainability of the current bullish momentum.

Investor Takeaway: Balancing Momentum with Caution

Power Grid Corporation of India Ltd’s recent surge in call option activity and strong price performance reflect a growing bullish sentiment among traders and short-term investors. The stock’s outperformance relative to its sector and the broader Sensex, combined with rising delivery volumes and technical strength, suggest positive near-term momentum.

However, the cautious analyst ratings and modest Mojo Score highlight underlying concerns that may limit upside potential. Investors should consider the stock’s valuation, sector risks, and expiry-related volatility before committing significant capital. The attractive dividend yield provides some cushion for longer-term holders seeking income stability.

Overall, POWERGRID remains a key large-cap stock to watch within the Power sector, with option market activity offering valuable insights into market expectations and positioning ahead of the February expiry.

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