Tata Motors Passenger Vehicles Sees Heavy Call Option Activity Ahead of March Expiry

Robust Call Option Trading Highlights Investor Sentiment

On 27 February 2026, TMPV recorded a remarkable 3,231 call option contracts traded at the ₹400 strike price, generating a turnover of ₹24.56 crores. The open interest for these contracts stands at 4,507, indicating sustained investor interest and potential accumulation ahead of the expiry date. The underlying stock price was ₹389.05, slightly below the strike price, suggesting that traders are positioning for an upward move in the coming weeks.

This heightened activity in call options contrasts with the stock’s day change of -0.68%, reflecting a divergence between spot price movement and derivatives market sentiment. The call option volume and open interest data imply that market participants are anticipating a rebound or a positive catalyst that could push TMPV above the ₹400 level by the end of March.

Stock Performance and Technical Indicators

Despite the recent dip, Tata Motors Passenger Vehicles Ltd has outperformed its sector by 0.58% on the day, even as the broader automobile sector declined by 1.08% and the Sensex slipped 0.54%. The stock’s technical profile shows it trading above its 5-day, 20-day, 50-day, and 100-day moving averages, though it remains below the 200-day moving average. This pattern suggests a short- to medium-term bullish trend with some resistance at longer-term levels.

Investor participation has notably increased, with delivery volumes reaching 81.08 lakh shares on 26 February, a 65.69% rise compared to the five-day average. This surge in delivery volume underscores genuine buying interest rather than speculative trading, reinforcing the bullish undertone in the market.

Fundamental and Market Context

Tata Motors Passenger Vehicles Ltd is a large-cap company with a market capitalisation of ₹1,44,220 crores, operating within the highly competitive automobile industry. The company’s Mojo Score currently stands at 41.0, with a Mojo Grade of Sell, downgraded from Hold on 4 November 2024. The downgrade reflects some concerns over near-term fundamentals or valuation pressures, yet the derivatives market activity suggests that traders are looking beyond these challenges.

The stock’s market cap grade is 1, indicating its large-cap status but also signalling limited upside from a purely market capitalisation perspective. However, the liquidity profile remains robust, with the stock capable of handling trade sizes up to ₹7.88 crores based on 2% of the five-day average traded value, making it attractive for institutional and retail investors alike.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the ₹400 strike price for the 30 March 2026 expiry is particularly noteworthy. This strike is approximately 2.8% above the current underlying price, indicating a moderately bullish stance among traders who expect the stock to breach this level within the next month. The open interest of 4,507 contracts at this strike is among the highest for TMPV, suggesting a key resistance or target level for market participants.

Options expiry often brings increased volatility and price discovery, and the build-up in call options ahead of the March expiry could foreshadow a significant price movement. Traders may be positioning for a positive earnings announcement, new product launches, or favourable macroeconomic developments impacting the automobile sector.

Balancing Bullish Positioning with Caution

While the call option activity signals optimism, investors should remain cautious given the stock’s recent downward movement after two consecutive days of gains. The stock’s failure to surpass the 200-day moving average may act as a technical barrier, and the Mojo Grade downgrade to Sell reflects underlying concerns that could temper upside momentum.

Moreover, the automobile sector faces challenges such as fluctuating raw material costs, regulatory changes, and evolving consumer preferences, which could impact Tata Motors Passenger Vehicles Ltd’s near-term performance. Investors should weigh these factors alongside the bullish derivatives positioning to make informed decisions.

Implications for Investors and Traders

The surge in call option activity at the ₹400 strike price ahead of the March expiry provides a clear signal of bullish sentiment among traders, potentially driven by expectations of positive catalysts or technical breakouts. For investors, this presents an opportunity to monitor the stock closely for signs of momentum confirmation or reversal.

Traders may consider strategies such as buying calls or call spreads to capitalise on anticipated upward moves, while risk-averse investors should watch for confirmation from the underlying stock’s price action and broader market trends. The increased delivery volumes and liquidity support active trading, but the mixed technical signals warrant a balanced approach.

Overall, Tata Motors Passenger Vehicles Ltd remains a key stock to watch within the automobile sector, with derivatives market activity providing valuable insights into investor expectations and potential price trajectories in the near term.

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