Tata Motors Passenger Vehicles Sees Surge in Call Option Activity Ahead of February Expiry

Robust Call Option Activity Highlights Investor Optimism

The most active call options for Tata Motors Passenger Vehicles Ltd are concentrated at the ₹360 strike price, with 8,338 contracts traded recently. This activity generated a turnover of ₹663.7 lakhs, accompanied by an open interest of 3,450 contracts. The underlying stock price currently stands at ₹357.0, just shy of the strike price, indicating that traders are positioning for a potential upward move in the near term.

Such elevated call option volumes suggest that market participants are anticipating a bullish breakout or at least a sustained rally in the stock price before the February expiry. The strike price of ₹360 is particularly significant as it is marginally above the current market price, implying a moderately optimistic outlook among option buyers who expect the stock to surpass this level within the next three weeks.

Stock Performance and Technical Indicators

On 2 February 2026, Tata Motors Passenger Vehicles Ltd recorded a day’s high of ₹357.25, marking a 3.66% intraday gain. The stock outperformed its automobile sector peers by 2.64% and the Sensex by 3.08% (Sensex gained 0.16%). This performance follows a two-day decline, signalling a potential trend reversal as investor sentiment appears to be improving.

Technically, the stock is trading above its 5-day, 20-day, and 50-day moving averages, which often indicates short- to medium-term strength. However, it remains below its 100-day and 200-day moving averages, suggesting that longer-term resistance levels have yet to be overcome. This mixed technical picture may explain the cautious optimism reflected in the call option market.

Rising Investor Participation and Liquidity

Investor participation has increased notably, with delivery volumes reaching 63.04 lakhs on 30 January 2026, a 9.44% rise compared to the five-day average. This uptick in delivery volume indicates stronger conviction among buyers, as more investors are holding shares rather than trading intraday.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹8.05 crores based on 2% of the five-day average. This liquidity profile is favourable for institutional investors and traders looking to execute large orders without significant price impact.

Fundamental and Market Context

Tata Motors Passenger Vehicles Ltd operates within the automobile industry, specifically focusing on passenger vehicles. It is classified as a large-cap stock with a market capitalisation of approximately ₹1,28,734 crores. Despite its size and sector prominence, the company’s MarketsMOJO score currently stands at 36.0, reflecting a Sell grade as of 4 November 2024, downgraded from a Hold rating. This downgrade signals concerns over the company’s near-term fundamentals or valuation metrics.

Its market cap grade is 1, indicating a relatively lower quality or risk profile compared to peers. Investors should weigh these fundamental considerations against the recent bullish option activity and price momentum to form a balanced view.

Expiry Patterns and Strategic Implications

The expiry date for the most active call options is 24 February 2026, which is less than a month away. This short time frame intensifies the importance of near-term catalysts such as quarterly earnings, new product launches, or sectoral developments that could drive the stock price above the ₹360 strike price.

Option traders appear to be positioning for a positive event or sustained buying pressure that could push TMPV shares higher. The open interest of 3,450 contracts at this strike price also suggests that a significant number of traders are holding these positions, potentially leading to increased volatility as expiry approaches.

Balancing Bullish Sentiment with Caution

While the surge in call option activity and recent price gains point to bullish sentiment, the downgrade to a Sell rating and the stock’s position below longer-term moving averages counsel caution. Investors should monitor upcoming corporate announcements and broader market trends in the automobile sector before committing significant capital.

Moreover, the stock’s outperformance relative to the sector and Sensex on 2 February 2026 may be a short-term rebound rather than a sustained rally, especially given the mixed technical signals. Traders utilising options should consider implied volatility and time decay factors when evaluating potential strategies.

Conclusion: Tactical Opportunity Amid Mixed Signals

The recent spike in call option volumes for Tata Motors Passenger Vehicles Ltd highlights a tactical opportunity for investors and traders anticipating a near-term price appreciation. The ₹360 strike price call options expiring on 24 February 2026 have attracted significant interest, reflecting a moderately bullish consensus.

However, the company’s fundamental outlook remains challenged, as evidenced by the Sell rating and modest MarketsMOJO score. The stock’s technical positioning suggests potential resistance ahead, and investors should remain vigilant for market developments that could confirm or negate the current bullish momentum.

For those considering exposure to TMPV, a balanced approach combining fundamental analysis with technical and options market insights is advisable to navigate the evolving landscape effectively.

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