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

Open Interest and Volume Dynamics

On 22 January 2026, SAIL’s open interest (OI) in the derivatives market surged to 73,902 contracts, marking a substantial increase of 20,846 contracts or 39.29% compared to the previous day’s OI of 53,056. This sharp rise in OI, coupled with a daily volume of 85,492 contracts, indicates a strong influx of fresh positions rather than mere unwinding of existing ones. The futures value stood at ₹393,658.37 lakhs, while the options segment contributed a massive ₹21,717,431,658 in value, culminating in a total derivatives market value of approximately ₹397,437.27 lakhs for SAIL.

The underlying stock price has also been on an upward trajectory, hitting a new 52-week high of ₹153.9 during intraday trading, representing a 5.09% gain on the day. This performance outpaced the Ferrous Metals sector, which rose by 1.80%, and the broader Sensex, which advanced by 0.48%. Over the past two trading sessions, SAIL has delivered a cumulative return of 3.45%, signalling sustained buying interest.

Market Positioning and Investor Behaviour

The surge in open interest alongside rising volumes typically suggests that market participants are establishing new directional bets rather than closing out positions. In SAIL’s case, the increase in delivery volume to 79.78 lakh shares on 21 January, up 12.13% from the five-day average, further corroborates genuine investor participation rather than speculative intraday trading. This rising investor engagement is a positive sign for the stock’s near-term outlook.

Moreover, SAIL is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a strong technical uptrend. Such positioning often attracts momentum traders and institutional investors, who may be betting on continued price appreciation supported by improving fundamentals or sector tailwinds.

Fundamental and Sector Context

Steel Authority Of India Ltd., a key player in the Ferrous Metals industry, currently holds a market capitalisation of ₹62,420.50 crore, categorising it as a mid-cap stock. The company’s recent upgrade in MarketsMOJO’s Mojo Grade from Sell to Hold on 23 December 2025, with a Mojo Score of 65.0, reflects a cautious but improving outlook. The Market Cap Grade remains at 2, indicating moderate size and liquidity.

Within the broader ferrous metals sector, SAIL’s outperformance is notable given the sector’s mixed performance amid fluctuating raw material costs and global steel demand uncertainties. The stock’s ability to sustain gains above key moving averages and its rising open interest suggest that investors are positioning for a potential recovery or sustained strength in steel prices.

Directional Bets and Derivatives Positioning

The pronounced increase in open interest, especially in futures contracts, often signals directional bets by market participants. Given the stock’s recent price highs and volume patterns, it is plausible that traders are adopting bullish strategies, anticipating further upside. The substantial options market value also indicates active hedging and speculative activity, with investors possibly buying call options or writing puts to capitalise on expected price gains.

However, the sizeable open interest also warrants caution. Elevated OI can sometimes precede increased volatility, especially if the stock fails to sustain momentum or if broader market conditions deteriorate. Investors should monitor changes in put-call ratios and expiry dynamics to gauge shifts in sentiment more precisely.

Liquidity and Trading Viability

SAIL’s liquidity profile remains robust, with the stock’s traded value supporting trade sizes up to ₹5.96 crore based on 2% of the five-day average traded value. This liquidity ensures that institutional investors can enter or exit positions without significant price impact, further supporting the stock’s attractiveness for larger trades and derivative strategies.

Outlook and Investor Considerations

While the recent surge in open interest and price momentum is encouraging, investors should remain mindful of the broader macroeconomic environment impacting the steel sector. Factors such as global steel demand, raw material price volatility, and government policies on infrastructure spending will continue to influence SAIL’s performance.

Given the current Mojo Grade of Hold and a recent upgrade from Sell, the stock appears to be in a consolidation phase with potential for upside, but not without risks. Investors may consider monitoring derivative market activity closely as a barometer of market sentiment and positioning, especially ahead of key expiry dates.

In summary, Steel Authority Of India Ltd.’s sharp increase in open interest, combined with strong volume and price action, signals renewed market optimism and a possible directional shift towards bullishness. However, prudent risk management and ongoing analysis of sector fundamentals remain essential for investors navigating this mid-cap stock’s evolving landscape.

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