Strong Call Option Turnover Signals Market Interest
Data from the derivatives segment reveals that Shriram Finance Ltd witnessed substantial call option trading volumes for contracts expiring on 30 December 2025. The strike prices of ₹970 and ₹980 attracted the most attention, with 8,608 and 8,014 contracts traded respectively. These figures translate into a combined turnover exceeding ₹13 crores, underscoring the active positioning by market participants.
The open interest at these strikes also indicates sustained interest, with 1,777 contracts open at the ₹970 strike and 2,632 contracts at ₹980. This concentration of open interest near the current underlying value of ₹970.25 suggests that traders are positioning for potential upward price movement in the near term.
Underlying Stock Performance Supports Bullish Sentiment
Shriram Finance’s underlying stock price has demonstrated resilience, trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This technical positioning often signals a positive trend and can encourage bullish option strategies. The stock has recorded a 1.31% return on the day, outperforming the NBFC sector’s 0.89% and the broader Sensex’s 0.12% gains.
Moreover, the stock has been on a six-day consecutive gain streak, delivering a cumulative return of 14.44% during this period. Such momentum typically attracts speculative and hedging activity in the options market, as investors seek to capitalise on anticipated price appreciation or protect existing positions.
Liquidity and Trading Volume Context
Liquidity remains adequate for sizeable trades, with the stock’s traded value supporting transactions up to approximately ₹40 crore based on 2% of the five-day average traded value. However, delivery volume on 23 December stood at 79.5 lakh shares, reflecting a 24% decline compared to the five-day average. This reduction in delivery volume may indicate a shift towards more short-term trading and derivatives activity rather than outright stock accumulation.
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Expiry Patterns and Strike Price Concentration
The expiry date of 30 December 2025 is attracting the bulk of call option activity, with strike prices clustered tightly around the current market price. The ₹970 strike, almost at-the-money, has the highest number of contracts traded, indicating that traders are betting on the stock maintaining or surpassing this level by expiry.
The ₹980 strike, slightly out-of-the-money, also commands significant open interest and turnover, suggesting expectations of a moderate price rise. This pattern of option activity is consistent with a market view that Shriram Finance may continue its upward trajectory in the short term.
Sector and Market Capitalisation Context
Shriram Finance operates within the NBFC sector, a segment that has been under close scrutiny due to evolving regulatory and economic conditions. With a market capitalisation of approximately ₹1,80,206 crore, the company is classified as a large-cap stock, attracting institutional and retail investor attention alike.
The stock’s performance today outpaced the NBFC sector by 0.68%, reinforcing its relative strength within the industry. This outperformance, combined with the active call option interest, highlights Shriram Finance as a key player in the sector’s current market narrative.
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Implications for Investors and Traders
The concentrated call option activity at near-the-money strikes and the expiry date less than a week away suggest that market participants are positioning for a potential continuation of the current bullish trend. Investors may interpret this as a sign of confidence in Shriram Finance’s near-term prospects, supported by its technical strength and sectoral positioning.
However, the decline in delivery volume indicates a nuanced market environment where short-term trading and derivatives strategies are gaining prominence over long-term accumulation. This dynamic may reflect a cautious approach amid broader market uncertainties, with traders seeking to capitalise on volatility and price movements through options.
Conclusion
Shriram Finance’s active call option market, combined with its solid price performance and sectoral context, positions it as a noteworthy stock for investors monitoring the NBFC space. The option market data reveals a clear preference for strike prices close to the current market level, signalling expectations of sustained or modestly higher prices by the end of December.
As expiry approaches, the evolving open interest and turnover figures will provide further insights into market sentiment and potential price direction. For investors and traders alike, keeping a close watch on Shriram Finance’s derivatives activity alongside its fundamental and technical indicators will be essential in navigating the current market landscape.
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