Tata Consultancy Services Sees Surge in Call Option Activity Ahead of March Expiry

Robust Call Option Volumes Signal Investor Optimism

The most active call options for TCS are concentrated on the 30 March 2026 expiry, with significant volumes recorded across multiple strike prices. The ₹2,700 strike leads with 4,869 contracts traded, generating a turnover of ₹588.87 lakhs and an open interest of 7,421 contracts. Close behind is the ₹2,600 strike, with 2,997 contracts traded and a substantial turnover of ₹636.35 lakhs, despite a slightly lower open interest of 6,426 contracts. The ₹3,000 strike, though higher in strike price, has also attracted attention with 2,961 contracts traded and an open interest of 8,983 contracts, albeit with a more modest turnover of ₹50.42 lakhs.

This concentration of activity at strikes above and near the current underlying price suggests that traders are positioning for a potential rally in TCS shares over the coming month. The open interest figures, particularly at the ₹3,000 strike, indicate a strong build-up of bullish bets, possibly reflecting expectations of a breakout beyond the current trading range.

Stock Performance and Technical Context

Despite the bullish options activity, TCS shares remain approximately 2.43% above their 52-week low of ₹2,561.3, indicating the stock is still relatively close to its recent lows. The stock has shown signs of a trend reversal, gaining 1.92% on the day, in line with the broader IT - Software sector’s 2.11% gain and outperforming the Sensex’s 0.57% rise. Intraday, TCS touched a high of ₹2,652.6, marking a 3.07% increase from the previous close.

However, from a technical standpoint, TCS is trading below its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling that the stock remains in a consolidation or correction phase. This technical backdrop may explain the cautious optimism reflected in the call option market, where investors are selectively betting on a recovery but remain mindful of resistance levels.

Fundamental and Market Metrics

TCS is a large-cap heavyweight with a market capitalisation of ₹9,49,024.36 crores, operating in the Computers - Software & Consulting industry. The company’s Mojo Score has improved to 51.0, earning a Hold grade as of 22 April 2025, upgraded from a previous Sell rating. This upgrade reflects a stabilisation in fundamentals and market sentiment, although the stock has yet to demonstrate a decisive uptrend.

Investor participation has notably increased, with delivery volumes on 24 February reaching 50.9 lakhs, a 187.42% rise compared to the five-day average. This surge in delivery volume underscores growing conviction among long-term investors, complementing the speculative activity seen in the options market. Additionally, TCS offers a relatively attractive dividend yield of 4.23%, which may appeal to income-focused investors amid market volatility.

Expiry Patterns and Strike Price Preferences

The expiry date of 30 March 2026 is attracting the bulk of call option interest, with traders focusing on strikes that offer a balance between risk and reward. The ₹2,600 strike, slightly below the current market price, is popular for its relatively lower premium and potential for in-the-money gains if the stock rallies. The ₹2,700 strike, just above the current price, represents a near-term target for bullish traders, while the ₹3,000 strike is a more ambitious bet on a strong upside move.

Open interest data reveals that the ₹3,000 strike has the highest number of outstanding contracts (8,983), suggesting that many investors are holding positions anticipating a significant price appreciation. This could also indicate hedging activity by institutional players or market makers, who may be balancing their exposure ahead of the expiry.

Sectoral and Market Context

The IT - Software sector has been resilient, gaining 2.11% on the day, supported by positive earnings outlooks and steady demand for digital transformation services. TCS, as a sector leader, often sets the tone for peer performance. Its current Mojo Grade of Hold reflects a cautious stance, balancing the company’s strong market position against near-term technical challenges.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes of up to ₹23.51 crores based on 2% of the five-day average traded value. This liquidity facilitates active options trading and allows institutional investors to execute sizeable positions without significant market impact.

Investor Takeaways and Outlook

For investors analysing TCS, the current surge in call option activity ahead of the March expiry is a clear indicator of bullish positioning, albeit with measured optimism. The stock’s proximity to its 52-week low and trading below key moving averages suggest that while upside potential exists, caution is warranted given the technical resistance levels.

Long-term investors may find comfort in the company’s improved Mojo Score and Hold rating, alongside a healthy dividend yield of 4.23%. Meanwhile, traders looking to capitalise on short-term momentum should monitor open interest trends and volume spikes in call options, particularly at the ₹2,700 and ₹3,000 strikes, as these may signal impending price moves.

Overall, TCS remains a pivotal stock within the IT sector, with its options market activity providing valuable insights into market expectations and sentiment. As expiry approaches, the interplay between technical factors and fundamental strength will be critical in determining the stock’s trajectory.

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