Tata Consultancy Services Sees Robust Call Option Activity Amid Bullish Market Sentiment

Robust Call Option Volumes Highlight Investor Confidence

The most active call options for TCS are concentrated at the ₹3,200 and ₹3,300 strike prices, both expiring on 24 February 2026. The ₹3,200 strike call options recorded the highest number of contracts traded at 23,934, generating a turnover of approximately ₹2,458.20 lakhs. Meanwhile, the ₹3,300 strike calls saw 19,033 contracts traded with a turnover of ₹799.05 lakhs. Open interest figures further underscore sustained investor interest, with 4,844 contracts open at the ₹3,200 strike and 10,162 at ₹3,300.

This volume and open interest concentration near and slightly above the current underlying stock price of ₹3,225 suggests that traders are positioning for a potential upward move in TCS shares over the coming weeks. The preference for these strikes indicates expectations that the stock could breach these levels by expiry, reflecting a moderately bullish outlook.

Stock Performance and Technical Indicators Support Positive Sentiment

TCS outperformed its sector by 1.33% on the day, registering a 2.76% gain compared to the sector’s 1.50% rise and the Sensex’s decline of 1.03%. The stock reversed a two-day losing streak, touching an intraday high of ₹3,234, a 3.52% increase from the previous close. Notably, the weighted average price of traded volumes was closer to the day’s low, indicating that buyers were active even at lower price points, which can be a sign of accumulation.

From a technical perspective, TCS’s price remains above its 5-day, 20-day, 50-day, and 100-day moving averages, though it is still trading below the 200-day moving average. This pattern suggests a short- to medium-term bullish trend, albeit with some longer-term resistance to overcome. The rising delivery volume, which increased by 14.3% to 21.4 lakh shares on 30 January compared to the five-day average, further confirms growing investor participation and conviction.

Fundamental Strengths and Market Capitalisation

As a large-cap heavyweight with a market capitalisation of ₹11,30,960 crores, TCS remains a cornerstone of the Indian IT sector. The company operates within the Computers - Software & Consulting industry, a sector that continues to benefit from digital transformation trends globally. The current dividend yield of 3.49% adds to the stock’s appeal, providing income alongside capital appreciation potential.

MarketsMOJO’s latest assessment upgraded TCS’s Mojo Grade from Sell to Hold on 22 April 2025, reflecting improved fundamentals and market positioning. The Mojo Score stands at 57.0, indicating a neutral stance with room for upside should positive catalysts materialise. The Market Cap Grade remains at 1, consistent with its large-cap status and liquidity profile.

Expiry Patterns and Strategic Positioning in Options Market

The 24 February 2026 expiry date is attracting significant attention, with traders actively rolling positions or initiating fresh bullish bets. The concentration of call option activity at strikes just above the current market price suggests a strategic play on a near-term breakout. Open interest data reveals that the ₹3,300 strike has a notably higher open interest than the ₹3,200 strike, implying that investors are more confident in the stock surpassing the higher level by expiry.

Such positioning is typical when market participants anticipate positive earnings, favourable sectoral developments, or broader market tailwinds. Given TCS’s recent outperformance and technical signals, the options market appears to be pricing in a continuation of upward momentum.

Liquidity and Trading Dynamics

TCS’s liquidity remains robust, with the stock’s traded value comfortably supporting trade sizes up to ₹19.24 crores based on 2% of the five-day average traded value. This liquidity ensures that both institutional and retail investors can execute sizeable trades without significant price impact, an important consideration for options traders who often hedge or adjust positions dynamically.

The weighted average price being closer to the day’s low, despite the stock’s intraday high, suggests that buyers are accumulating shares steadily rather than chasing prices aggressively. This behaviour often precedes sustained rallies, as it reflects confidence in the stock’s valuation and future prospects.

Balancing Bullishness with Caution

While the surge in call option activity and positive price action indicate growing optimism, investors should remain mindful of the broader market context. The Sensex’s decline of 1.03% on the same day highlights underlying volatility and potential headwinds. Additionally, TCS’s price remains below its 200-day moving average, a key long-term technical resistance level that could temper gains if not decisively breached.

Investors should also consider the company’s current Mojo Grade of Hold, reflecting a neutral stance that balances recent improvements against lingering uncertainties. Monitoring upcoming earnings announcements, sector developments, and macroeconomic factors will be crucial to validate the bullish positioning reflected in the options market.

Conclusion: Strategic Opportunities in TCS Options

The concentrated call option activity at ₹3,200 and ₹3,300 strikes expiring on 24 February 2026 underscores a clear bullish bias among traders anticipating further upside in Tata Consultancy Services Ltd. The stock’s recent outperformance, rising delivery volumes, and technical positioning support this sentiment. However, investors should weigh these factors against broader market volatility and the stock’s longer-term resistance levels.

For those seeking exposure to TCS’s growth potential, the current options market offers strategic entry points with defined risk parameters. Meanwhile, the company’s large-cap status, solid dividend yield, and improving Mojo Grade provide a fundamental foundation for sustained investor interest.

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