Steel Authority Of India Ltd Sees Sharp Open Interest Surge Amid Mixed Price Action

Open Interest and Volume Dynamics

On 24 Feb 2026, SAIL's open interest (OI) in derivatives jumped to 65,284 contracts, marking a substantial increase of 15,360 contracts or 30.77% compared to the previous day's OI of 49,924. This surge in OI was accompanied by a daily volume of 38,025 contracts, indicating robust trading activity. The futures segment alone accounted for a value of approximately ₹2,59,492 lakhs, while options contributed a staggering ₹2,270 crore in notional value, underscoring the intense speculative interest in the stock.

The combined derivatives turnover stood at ₹2,59,630 lakhs, reflecting a liquidity profile that supports sizeable trade executions without significant market impact. The underlying stock price closed at ₹156, just 4.35% shy of its 52-week high of ₹163, suggesting that the derivatives market is positioning for potential near-term price movements.

Price and Technical Context

SAIL's recent price action has been somewhat mixed. The stock has declined by 1.61% over the last two trading days, underperforming slightly relative to its sector, which fell 0.10%, but outperforming the broader Sensex, which dropped 1.14% on the same day. The stock's one-day return was a marginal -0.30%, indicating relative stability despite the broader market weakness.

Technically, SAIL remains above its 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it is trading below its short-term 5-day and 20-day moving averages, reflecting some near-term consolidation or profit-taking. This technical setup often attracts derivative traders looking to capitalise on potential volatility or directional shifts.

Investor Participation and Delivery Volumes

Investor participation has notably increased, with delivery volumes on 23 Feb reaching 75.06 lakh shares, a 50.37% rise compared to the five-day average delivery volume. This surge in delivery volume indicates that more investors are holding shares rather than trading intraday, which can be a sign of confidence in the stock's medium-term prospects despite recent price softness.

Liquidity remains adequate, with the stock supporting trade sizes of up to ₹4.86 crore based on 2% of the five-day average traded value. This level of liquidity is favourable for institutional investors and large traders seeking to enter or exit positions without excessive slippage.

Market Positioning and Directional Bets

The sharp rise in open interest alongside elevated volumes suggests that market participants are actively repositioning. The increase in OI typically indicates that new money is flowing into the derivatives market, either through fresh long positions or new shorts. Given the stock's proximity to its 52-week high and the recent price consolidation, it is plausible that traders are hedging or speculating on a breakout or a pullback.

Options data, with a notional value exceeding ₹2,270 crore, points to significant activity in calls and puts, reflecting a range of strategies from directional bets to volatility plays. The elevated futures value of ₹2,59,492 lakhs further confirms that institutional and retail traders alike are positioning for meaningful price moves.

SAIL's Mojo Score currently stands at 65.0, with a Mojo Grade of Hold, upgraded from Sell on 23 Dec 2025. This upgrade reflects improved fundamentals and technicals, though the stock remains a mid-cap with a Market Cap Grade of 2, indicating moderate market capitalisation and liquidity constraints relative to larger peers.

Sector and Broader Market Context

Operating within the Ferrous Metals industry, SAIL's performance is closely tied to steel demand, raw material costs, and global commodity cycles. The sector has shown resilience recently, with SAIL's price movement largely in line with sector trends. However, the broader market's weakness, as seen in the Sensex's 1.14% decline, has introduced some caution among investors.

Given the stock's technical positioning above key moving averages and rising investor participation, the derivatives market's increased open interest may be a precursor to a directional move, either a breakout above recent highs or a corrective phase. Traders should monitor volume and OI changes closely alongside price action to gauge the prevailing sentiment.

Implications for Investors and Traders

For investors, the recent upgrade in Mojo Grade from Sell to Hold signals a cautious optimism about SAIL's medium-term prospects. The rising delivery volumes and sustained price levels above major moving averages support a constructive outlook, though the short-term price softness warrants prudence.

Derivatives traders should note the significant open interest build-up as a sign of increased market engagement and potential volatility. The mixed signals from price action and technical indicators suggest that the market is awaiting a catalyst to confirm direction. Close monitoring of OI changes, volume spikes, and option chain data will be critical to identify whether the dominant trend will be bullish or bearish.

Given the stock's liquidity profile and market cap, institutional players may find it suitable for strategic positioning, while retail traders should remain alert to sudden price swings driven by derivatives activity.

Conclusion

Steel Authority Of India Ltd. is currently at a pivotal juncture, with a notable surge in derivatives open interest reflecting heightened market interest and evolving positioning. While the stock trades near its 52-week high and maintains a Hold rating with a Mojo Score of 65.0, recent price softness and mixed technical signals suggest a cautious approach. Investors and traders alike should closely watch open interest trends, volume patterns, and sector dynamics to navigate the potential directional moves in this key ferrous metals player.

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