Steel Authority Of India Ltd Sees Surge in Call Option Activity Amid Bullish Momentum

Robust Price Performance and Technical Strength

SAIL has been on a steady upward trajectory, gaining 9.33% over the past four consecutive trading sessions. On 31 Dec 2025, the stock hit a new 52-week high of ₹147, marking a 4.24% intraday rise and opening with a gap up of 2.89%. Despite underperforming its sector marginally by 0.4% on the day, SAIL’s overall momentum remains strong, supported by its trading above all major moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day.

The ferrous metals sector, including steel, sponge iron, and pig iron, has gained 2.42% on the day, indicating broad-based strength. Investor participation has also surged, with delivery volumes on 30 Dec rising by 134.22% compared to the five-day average, reaching 1.53 crore shares. This heightened liquidity supports the stock’s capacity to absorb larger trades, with a daily trade size capacity of approximately ₹6.86 crore based on 2% of the five-day average traded value.

Call Option Activity Highlights Bullish Positioning

The most active call options for SAIL are concentrated on the 27 January 2026 expiry, with the ₹150 strike price attracting significant interest. A total of 2,945 contracts were traded, generating a turnover of ₹5.09 crore (509.3672 lakhs) and an open interest of 1,761 contracts. This level is particularly noteworthy as the underlying stock price currently stands at ₹144.10, indicating that traders are positioning for a potential breakout above the ₹150 mark within the next month.

Such heavy call option activity at this strike price suggests a strong bullish bias among market participants, who anticipate further upside in SAIL’s share price. The open interest accumulation also points to sustained interest rather than short-term speculative trades, reinforcing the view that investors expect the stock to maintain its upward momentum into early 2026.

Fundamental and Market Context

Steel Authority Of India Ltd. operates within the ferrous metals industry and is classified as a mid-cap company with a market capitalisation of approximately ₹58,240 crore. 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 improving fundamentals and a more balanced risk-reward profile.

Despite the upgrade, the market cap grade remains modest at 2, indicating that while the company is sizeable, it is not among the largest in its sector. This positioning may appeal to investors seeking exposure to a fundamentally improving steel producer with potential for capital appreciation as the sector recovers.

Sectoral Trends and Comparative Performance

The steel and allied metals sector has been buoyed by rising demand and improving pricing power, factors that have supported SAIL’s recent gains. The stock’s 1-day return of 2.46% slightly outpaced the sector’s 2.44% gain and significantly exceeded the Sensex’s modest 0.17% rise, underscoring its relative strength within the broader market.

Technical indicators and rising delivery volumes suggest that institutional investors are increasingly confident in SAIL’s near-term prospects. However, the stock’s recent underperformance relative to the sector on the day highlights some caution, possibly due to profit booking or sector rotation.

Options Market Insights and Expiry Patterns

The concentration of call option activity at the ₹150 strike price for the January 2026 expiry is a critical signal. This strike is just above the current trading price, implying that traders expect the stock to breach this resistance level within the next four weeks. The open interest of 1,761 contracts indicates that many investors are holding these positions, possibly as part of bullish strategies such as covered calls or outright long calls.

Such positioning often precedes a breakout or sustained rally, especially when supported by strong fundamentals and sector tailwinds. The turnover of over ₹5 crore in call options also reflects significant liquidity and investor conviction in this price target.

Investor Takeaways and Outlook

For investors, the current scenario presents a cautiously optimistic outlook on Steel Authority Of India Ltd. The stock’s technical strength, combined with robust call option activity at a near-term strike price, suggests that market participants are positioning for further gains. However, the mojo grade of Hold and the recent upgrade from Sell indicate that while the stock has improved, it still carries some risks and requires monitoring.

Investors should weigh the bullish signals from the options market against broader sector dynamics and company fundamentals. The ferrous metals industry remains cyclical and sensitive to global commodity prices, input costs, and demand fluctuations. As such, while the current momentum is encouraging, prudent risk management and diversification remain essential.

In summary, Steel Authority Of India Ltd. is attracting significant attention in the derivatives market, reflecting growing confidence in its near-term price appreciation potential. The January 2026 expiry call options at ₹150 strike price serve as a barometer of market expectations, signalling a possible breakout if sector conditions remain favourable.

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