Steel Authority Of India Ltd Sees Sharp Open Interest Surge Amid Bullish Momentum

Open Interest and Volume Dynamics

On 25 Feb 2026, SAIL's open interest in futures contracts rose sharply by 10,408 contracts, a 30.74% increase from the previous day's 33,862 to 44,270 contracts. This substantial rise in OI accompanied a volume of 33,653 contracts, indicating strong participation from both institutional and retail traders. The futures value stood at approximately ₹1,06,350 lakhs, while the options segment exhibited an even larger notional value of ₹16,241.7 crores, underscoring the stock's active derivatives market.

The total combined derivatives value was around ₹1,12,243 lakhs, reflecting a healthy liquidity pool that supports sizeable trade sizes. This liquidity is further evidenced by the stock's ability to handle trade sizes of up to ₹7.05 crores based on 2% of the 5-day average traded value, making it an attractive option for large traders and hedge funds.

Price Performance and Technical Strength

SAIL's price momentum has been impressive, with the stock gaining 5.73% over the last two consecutive trading sessions. On the day of analysis, it outperformed its ferrous metals sector peers by 1.48%, closing near its intraday high of Rs. 167.2, a 4.38% rise from the previous close. The stock is trading comfortably above its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a strong uptrend and positive technical setup.

The sector itself has gained 2.02% on the day, supported by rising demand for steel and related products, which bodes well for SAIL’s near-term prospects. The delivery volume on 24 Feb surged to 2.11 crore shares, a remarkable 258.97% increase over the 5-day average, indicating rising investor participation and conviction in the stock’s upward trajectory.

Market Positioning and Directional Bets

The sharp increase in open interest alongside rising prices and volumes suggests that market participants are positioning for further upside in SAIL. The rise in OI typically indicates fresh money entering the market rather than short covering, which aligns with the stock’s recent breakout to new highs. Traders appear to be taking bullish futures positions, anticipating continued strength in the ferrous metals sector driven by improving demand fundamentals and supportive government policies.

Options market data, with an options notional value exceeding ₹16,241 crores, also points to active hedging and speculative activity. The elevated options value suggests that investors are employing strategies such as call buying or bull call spreads to capitalise on expected price appreciation while managing risk. This heightened derivatives activity often precedes sustained price moves, reinforcing the bullish sentiment.

Fundamental and Sectoral Context

Steel Authority Of India Ltd., a mid-cap company with a market capitalisation of ₹67,823.23 crores, operates in the ferrous metals industry, which has shown resilience amid global supply chain disruptions and rising steel demand domestically. The company’s recent upgrade in Mojo Grade from Sell to Hold on 23 Dec 2025, with a Mojo Score of 65.0, reflects improving fundamentals and a more balanced risk-reward profile.

Despite the Hold rating, the stock’s recent price action and derivatives market activity suggest that investors are increasingly optimistic about its near-term prospects. The sector’s 1-day return of 1.97% and Sensex’s modest 0.22% gain on the same day highlight SAIL’s relative outperformance and leadership within its peer group.

Implications for Investors

For investors and traders, the surge in open interest combined with strong price and volume action in SAIL signals a potentially favourable entry point. The stock’s ability to sustain above key moving averages and its recent breakout to a 52-week high provide technical confirmation of strength. However, the Hold Mojo Grade advises caution, suggesting that while the stock is no longer a sell, investors should monitor sector developments and broader market conditions closely.

Given the ferrous metals sector’s cyclical nature, investors should consider the impact of global steel prices, raw material costs, and government infrastructure spending on SAIL’s earnings trajectory. The current derivatives market positioning indicates that many participants expect these factors to remain supportive in the near term.

Conclusion

Steel Authority Of India Ltd.’s recent open interest surge in derivatives, coupled with strong volume and price gains, highlights growing bullish sentiment and increased market participation. While the company holds a Hold rating with a Mojo Score of 65.0, the technical and derivatives data suggest that investors are positioning for further upside. The stock’s liquidity and relative outperformance within the ferrous metals sector make it a key name to watch for momentum-driven strategies and medium-term investment considerations.

As always, investors should balance these positive signals with fundamental analysis and risk management, especially given the sector’s sensitivity to global economic cycles and commodity price fluctuations.

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