Steel Authority Of India Ltd Sees Sharp Open Interest Surge Amidst Mixed Market Signals

Open Interest and Volume Dynamics

The latest data reveals that SAIL’s futures open interest jumped by 14,543 contracts, a substantial 29.13% increase, signalling heightened participation in the derivatives market. The volume for the day stood at 35,099 contracts, reflecting active trading interest. The futures value is estimated at ₹2,41,672.74 lakhs, while the options segment commands a massive ₹1,90,29,29.65 lakhs, culminating in a total derivatives market value of approximately ₹2,41,768.84 lakhs.

This surge in OI alongside strong volume indicates that market participants are either initiating new positions or adding to existing ones, rather than merely closing out trades. Such behaviour often precedes significant price movements, as traders position themselves for anticipated directional shifts.

Price and Technical Context

SAIL’s underlying stock price closed at ₹156, just 3.89% shy of its 52-week high of ₹163, underscoring a near-term bullish undertone. The stock’s one-day return was a modest 0.30%, outperforming the ferrous metals sector’s decline of 0.06% and the broader Sensex’s fall of 0.80%. Notably, the stock trades above its 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend, although it remains below the 5-day and 20-day averages, suggesting some short-term consolidation or profit-taking.

Investor participation has also risen markedly, with delivery volumes on 23 Feb reaching 75.06 lakh shares, a 50.37% increase over the five-day average. This heightened delivery volume confirms genuine buying interest rather than speculative trading, reinforcing the stock’s liquidity and attractiveness for sizeable trades, with a tradable value capacity of ₹4.86 crore based on 2% of the five-day average traded value.

Market Positioning and Directional Bets

The sharp increase in open interest, particularly in futures contracts, suggests that traders are positioning for a directional move in SAIL’s stock price. Given the stock’s proximity to its 52-week high and the positive relative performance against sector and benchmark indices, the bias appears to be bullish. However, the short-term moving averages indicate some caution, possibly reflecting profit-booking or a pause before the next leg up.

Options market data, with an enormous notional value exceeding ₹1.9 lakh crore, further highlights the intense hedging and speculative activity around SAIL. The large options value relative to futures suggests that investors are employing complex strategies, possibly combining calls and puts to manage risk or capitalise on volatility.

Such positioning often precedes earnings announcements, policy changes, or macroeconomic developments impacting the ferrous metals sector. Investors should monitor upcoming corporate events and global commodity price trends, as these will likely influence SAIL’s price trajectory and derivatives activity.

Fundamental and Rating Update

Steel Authority Of India Ltd. currently holds a Mojo Score of 65.0, reflecting a Hold rating, upgraded from a previous Sell grade on 23 Dec 2025. This upgrade indicates improving fundamentals and market sentiment, though the stock remains a mid-cap with a market capitalisation of ₹65,180 crore and a Market Cap Grade of 2, signalling moderate size and liquidity constraints compared to larger peers.

The Hold rating suggests that while the stock shows promise, investors should exercise caution and consider valuation and sector dynamics before committing fresh capital. The ferrous metals industry remains cyclical and sensitive to global steel demand, raw material costs, and government policies.

Implications for Investors

For investors and traders, the recent surge in open interest and volume in SAIL’s derivatives signals an opportune moment to reassess exposure. The stock’s technical positioning above key moving averages and near 52-week highs supports a cautiously optimistic outlook. However, the Hold rating and mid-cap status counsel measured allocation, especially given the sector’s inherent volatility.

Market participants should watch for confirmation of trend continuation through price action and volume in the coming sessions. Additionally, monitoring changes in put-call ratios and strike price concentrations in the options market can provide further clues on market expectations and risk appetite.

Overall, the derivatives market activity reflects a growing conviction among institutional and retail investors that SAIL is poised for meaningful price movement, likely to the upside, but tempered by short-term technical resistance and broader market conditions.

Conclusion

Steel Authority Of India Ltd.’s recent open interest surge in derivatives, combined with rising delivery volumes and a positive relative price performance, underscores a shift in market positioning towards a more bullish stance. While the stock remains a Hold on fundamental grounds, the derivatives data suggests that traders are gearing up for potential upside moves. Investors should remain vigilant, balancing the technical signals with sector fundamentals and macroeconomic factors to navigate this evolving landscape effectively.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today