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

Overview of Call Option Activity

In the lead-up to the 30 December 2025 expiry, Tata Motors Passenger Vehicles has recorded substantial call option trades across multiple strike prices. The underlying stock closed at ₹339.25, hovering just 2.33% above its 52-week low of ₹331.09. This proximity to the low has coincided with active call option interest, signalling a complex market outlook.

Among the most actively traded call options, the strike price of ₹360 stands out with 15,231 contracts traded, generating a turnover of approximately ₹137.69 lakhs and an open interest of 17,603 contracts. This strike is notably above the current underlying price, suggesting a degree of bullish positioning among option traders anticipating upward movement before expiry.

Other strike prices with significant activity include ₹350, where 10,456 contracts changed hands with a turnover near ₹204.94 lakhs and open interest of 11,926 contracts, and ₹370, which saw 8,372 contracts traded with turnover of ₹40.86 lakhs and open interest of 12,383 contracts. The ₹380 strike also attracted attention with 8,139 contracts traded and open interest of 12,272 contracts, albeit with a lower turnover of ₹22.79 lakhs.

Lower strike prices such as ₹340 recorded 5,021 contracts traded, turnover of ₹239.00 lakhs, and open interest of 3,320 contracts, reflecting a spectrum of investor strategies ranging from near-the-money to out-of-the-money call options.

Market Context and Stock Performance

Tata Motors Passenger Vehicles operates within the automobiles sector and is classified as a large-cap company with a market capitalisation of approximately ₹1,27,482 crores. Despite its size, the stock has underperformed its sector by 1.01% on the day, closing with a decline of 2.11%. This compares with the sector’s 1.28% fall and the broader Sensex’s marginal 0.25% drop, indicating relatively weaker performance.

The stock’s intraday low touched ₹338.50, representing a 2.27% decline on the day. Technical indicators show the share price trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a bearish trend in the short to medium term. Additionally, investor participation appears to be waning, with delivery volume on 17 December recorded at 38.13 lakh shares, down 15.41% compared to the five-day average delivery volume.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹5.55 crores based on 2% of the five-day average traded value. This liquidity is crucial for options traders seeking to enter or exit positions without significant market impact.

Interpretation of Option Market Positioning

The concentration of call option activity at strike prices above the current market price suggests that investors are positioning for a potential rebound or upward price movement in Tata Motors Passenger Vehicles before the December expiry. The highest open interest at the ₹360 strike, well above the current ₹339.25, indicates a sizeable number of contracts that could become profitable if the stock price rises beyond this level.

Similarly, the active trading at ₹370 and ₹380 strikes, with open interest exceeding 12,000 contracts each, reflects speculative interest or hedging strategies anticipating a bullish scenario. The turnover figures, particularly at ₹350 and ₹360 strikes, demonstrate significant capital allocation towards these positions, underscoring the importance of these levels in market participants’ outlook.

Conversely, the presence of call option activity at the ₹340 strike, close to the current price, may represent more conservative bullish bets or spread strategies designed to capitalise on moderate price appreciation.

Expiry Patterns and Implications

With the expiry date set for 30 December 2025, traders have approximately two weeks to monitor developments that could influence Tata Motors Passenger Vehicles’ share price trajectory. The clustering of open interest and volume around strikes from ₹340 to ₹380 suggests that these levels will be critical in determining the stock’s near-term volatility and price direction.

Expiry dynamics often lead to increased volatility as traders adjust or close positions, and the current data implies that the market is closely watching Tata Motors Passenger Vehicles for potential price movements that could trigger option payoffs. The relatively high open interest at out-of-the-money strikes may also lead to gamma-driven price swings as expiry approaches.

Investor Considerations

Investors analysing Tata Motors Passenger Vehicles should weigh the current option market activity alongside the stock’s technical and fundamental backdrop. The proximity to a 52-week low and trading below key moving averages may caution some market participants, while the robust call option interest at higher strikes indicates a segment of investors anticipating a recovery or rally.

Given the stock’s large-cap status and significant market capitalisation, liquidity constraints are minimal, allowing for efficient execution of trades and option strategies. However, the recent decline in delivery volumes suggests a reduction in committed investor participation, which could influence price stability in the near term.

Monitoring the evolution of open interest and volume in the days leading to expiry will provide further insight into market sentiment and potential price targets. Traders and investors should also consider broader sector trends and macroeconomic factors impacting the automobile industry as they assess Tata Motors Passenger Vehicles’ outlook.

Summary

Tata Motors Passenger Vehicles is currently a focal point in the options market, with call options for the 30 December 2025 expiry showing heavy trading volumes and open interest concentrated at strike prices above the current market level. This activity reflects a blend of cautious optimism and speculative positioning amid a backdrop of technical weakness and sector underperformance. As expiry approaches, the stock’s price action around these key strikes will be closely watched by market participants seeking to capitalise on or hedge against potential movements.

Only Rs. 14,999 - Get MojoOne + Stock of the Week for 1 Year PLUS 18 Months FREE! Claim Your Free Year →