Robust Call Option Activity Signals Investor Optimism
On 20 February 2026, TCS emerged as the most active stock in call options, with 7,339 contracts traded at the 2,700 strike price expiring on 24 February 2026. This volume translated into a turnover of approximately ₹284.48 lakhs, underscoring significant investor interest in bullish bets on the stock. Open interest at this strike stands at 4,352 contracts, indicating sustained positioning rather than mere speculative spikes.
The underlying stock price closed at ₹2,681.70, just 3.81% above its 52-week low of ₹2,585, suggesting that investors are positioning for a rebound from recent lows. The 2,700 strike price call options are slightly out-of-the-money, implying expectations of a moderate upside in the near term.
Price and Trend Context: Mixed Signals
Despite the bullish option activity, TCS’s price action presents a complex picture. The stock has outperformed its sector by 1.08% on the day, registering a modest 0.24% gain compared to the sector’s 0.63% decline and the Sensex’s marginal 0.07% rise. This outperformance follows two consecutive days of declines, signalling a potential trend reversal in the short term.
However, TCS remains below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating that the broader trend remains bearish. Investor participation has also waned, with delivery volume on 19 February falling by 58.12% against the five-day average, suggesting cautious sentiment among long-term holders.
On the positive side, the stock offers a high dividend yield of 4.07%, which may attract income-focused investors amid volatility. Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹28.32 crores, ensuring ease of entry and exit for institutional players.
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Mojo Score Upgrade Reflects Improving Fundamentals
MarketsMOJO’s proprietary Mojo Score for TCS currently stands at 51.0, reflecting a Hold rating with a recent upgrade from Sell on 22 April 2025. This upgrade signals a cautious improvement in the company’s fundamentals and market outlook, though the score remains moderate, indicating that investors should weigh risks carefully.
The company’s market capitalisation is substantial at ₹9,71,167.05 crores, categorising it firmly as a large-cap stock with a Market Cap Grade of 1. This scale provides stability but also means that sharp price movements are less frequent, requiring investors to focus on incremental gains and strategic positioning.
Expiry Patterns and Strike Price Insights
The concentration of call option activity at the 2,700 strike price for the 24 February expiry suggests that investors anticipate a near-term recovery of approximately 0.7% from the current underlying price. This strike is a focal point for bullish bets, with open interest indicating that many traders are holding these positions into expiry, possibly expecting a breakout above this level.
Given the stock’s proximity to its 52-week low and the recent trend reversal, this positioning could reflect a tactical play by traders seeking to capitalise on a short-term rebound catalysed by positive sector developments or company-specific news.
Sector and Market Comparison
Within the Computers - Software & Consulting sector, TCS’s performance today stands out positively against a sector decline of 0.63%. This relative strength may be attracting call option buyers who view TCS as a defensive play amid sector-wide pressures. The Sensex’s marginal gain of 0.07% further highlights TCS’s outperformance, reinforcing the stock’s appeal as a large-cap leader in a challenging environment.
However, the stock’s trading below all major moving averages and the sharp drop in delivery volumes caution investors to remain vigilant. The mixed technical signals suggest that while short-term bullish bets are increasing, the broader trend remains uncertain.
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Investor Takeaway: Balancing Bullish Options with Caution
The surge in call option volumes at the 2,700 strike price expiry on 24 February 2026 highlights a growing bullish sentiment among traders betting on a near-term recovery in TCS’s share price. This optimism is supported by the stock’s recent outperformance relative to its sector and the Sensex, as well as a potential trend reversal after two days of declines.
Nevertheless, the stock’s position below all key moving averages and the significant drop in delivery volumes suggest that the broader market remains cautious. Investors should consider the high dividend yield of 4.07% as a stabilising factor but remain mindful of the technical challenges facing the stock.
For those looking to capitalise on the current momentum, the 2,700 strike call options offer a strategic entry point with defined risk and reward parameters. However, given the Hold rating and moderate Mojo Score, a balanced approach combining options trading with fundamental analysis is advisable.
Overall, TCS’s option market activity provides valuable insight into investor expectations, signalling a tentative but notable shift towards bullish positioning in a large-cap software leader.
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