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

Robust Call Option Volume and Open Interest

On 11 February 2026, TMPV’s call options with a strike price of ₹380 expiring on 24 February 2026 emerged as the most actively traded contracts. A total of 6,703 contracts changed hands, generating a turnover of ₹608.63 lakhs. The open interest for these contracts stands at 6,628, indicating sustained interest and potential accumulation by market participants. This level of activity is significant given the underlying stock price of ₹384.35, which is marginally above the strike price, suggesting traders are positioning for a possible upward move in the near term.

Stock Performance and Technical Context

Tata Motors Passenger Vehicles Ltd has been on a steady upward trajectory, gaining 3.91% over the past three consecutive trading sessions. The stock’s daily return on 11 February was 1.17%, slightly lagging the automobile sector’s 1.51% gain but outperforming the Sensex, which was essentially flat at -0.01%. The stock has traded within a narrow range of ₹3.5, reflecting a consolidation phase ahead of potential directional movement.

Technically, TMPV is trading above its 5-day, 20-day, 50-day, and 100-day moving averages, signalling short- to medium-term strength. However, it remains below the 200-day moving average, indicating that longer-term momentum has yet to fully confirm a bullish trend. This mixed technical picture may explain the cautious optimism reflected in the call option activity.

Investor Participation and Liquidity Considerations

Despite the positive price action, investor participation appears to be waning. Delivery volume on 10 February was 49.05 lakhs, down 27.96% compared to the five-day average delivery volume. This decline suggests that while the stock price is rising, fewer investors are committing to holding shares, possibly awaiting clearer signals or reacting to the recent downgrade by MarketsMOJO.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting a trade size of approximately ₹10.41 crores based on 2% of the five-day average. This ensures that institutional and retail investors can execute orders without significant market impact.

Mojo Score and Rating Dynamics

MarketsMOJO recently downgraded Tata Motors Passenger Vehicles Ltd from a Hold to a Sell rating on 4 November 2024, reflecting concerns about the company’s near-term outlook. The Mojo Score currently stands at 41.0, a relatively low figure that aligns with the Sell grade. The market cap grade is 1, indicating that despite its large-cap status with a market capitalisation of ₹1,39,652 crores, the stock faces challenges in quality and momentum metrics.

This downgrade contrasts with the bullish positioning seen in the options market, suggesting a divergence between fundamental assessments and speculative trading activity. Investors should weigh these conflicting signals carefully when considering exposure to TMPV.

Expiry Patterns and Strike Price Significance

The concentration of call option activity at the ₹380 strike price, close to the current underlying price, is typical as expiry approaches. Traders often focus on near-the-money strikes to capitalise on expected volatility or directional moves. The 24 February expiry date is just under two weeks away, intensifying the urgency for market participants to establish or adjust positions.

Open interest levels near the strike price can act as support or resistance zones in the underlying stock, as option writers hedge their positions. The sizeable open interest at ₹380 suggests that this level may become a focal point for price action in the coming days.

Sector and Market Context

The automobile sector has shown resilience recently, with the sector index outperforming the broader market. Tata Motors Passenger Vehicles Ltd’s performance is broadly in line with sector trends, though slightly behind on the latest trading day. The company’s large-cap status and liquidity make it a preferred choice for institutional investors seeking exposure to passenger vehicle manufacturing.

However, the mixed technical signals and recent downgrade highlight the importance of monitoring broader macroeconomic factors, such as raw material costs, regulatory changes, and consumer demand trends, which could influence the stock’s trajectory.

Investor Takeaways and Outlook

For investors, the surge in call option activity at the ₹380 strike price ahead of the 24 February expiry suggests a cautiously optimistic outlook among derivatives traders. The underlying stock’s recent gains and technical positioning support this view, although the broader downgrade and falling delivery volumes counsel prudence.

Market participants should monitor price action around the ₹380 level closely, as it may serve as a pivot point influenced by option-related hedging. Additionally, keeping an eye on sector developments and macroeconomic indicators will be crucial to gauge the sustainability of any upward momentum.

Given the current Mojo Score and Sell rating, investors may prefer to adopt a selective approach, balancing speculative opportunities in the options market with fundamental risks inherent in the stock.

Summary

Tata Motors Passenger Vehicles Ltd’s active call option trading ahead of the February expiry highlights a complex market sentiment. While derivatives traders are positioning for potential gains, fundamental assessments remain cautious. This divergence underscores the importance of a comprehensive analysis combining technical, fundamental, and derivatives data for informed investment decisions in the automobile sector.

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