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

Call Option Trading Highlights

The most actively traded call options for Tata Motors Passenger Vehicles are concentrated at the ₹350 and ₹360 strike prices, both expiring on 30 December 2025. At the ₹350 strike, 8,763 contracts changed hands, generating a turnover of approximately ₹450.07 lakhs. Open interest at this strike stands at 8,764 contracts, indicating sustained interest and potential for further activity.

Meanwhile, the ₹360 strike price recorded even higher activity, with 12,443 contracts traded and a turnover of ₹252.84 lakhs. Open interest here is notably larger at 13,315 contracts, suggesting that market participants are positioning for a possible upward move beyond this level in the near term.

Underlying Stock Performance and Market Context

Tata Motors Passenger Vehicles outperformed its sector on the day, registering a 1.89% return compared to the sector’s 0.52% and the Sensex’s 0.57%. The stock touched an intraday high of ₹353.10, marking a 2.11% rise during trading. This performance is supported by rising investor participation, with delivery volumes on 18 December reaching 78.81 lakh shares, an 83.81% increase over the five-day average delivery volume.

From a technical perspective, the stock’s price currently sits above its five-day moving average but remains below its 20-day, 50-day, 100-day, and 200-day moving averages. This positioning suggests short-term momentum with room for further directional movement depending on broader market conditions and company-specific developments.

Liquidity and Market Capitalisation

With a market capitalisation of ₹1,27,372 crore, Tata Motors Passenger Vehicles is classified as a large-cap stock within the automobile sector. The stock’s liquidity supports sizeable trades, with the average traded value over five days allowing for trade sizes up to ₹6.87 crore without significant market impact. This liquidity profile is conducive to active options trading and institutional participation.

Investor Positioning and Expiry Patterns

The concentration of call option activity near the current stock price indicates a bullish tilt among traders, who appear to be anticipating upward price movement before the December expiry. The ₹350 strike, being just below the underlying value, is a popular choice for those expecting the stock to hold or rise modestly. The heavier open interest and turnover at the ₹360 strike suggest that some investors are targeting a more optimistic scenario, betting on the stock surpassing this level within the next few weeks.

Expiry patterns in the options market often provide insight into market sentiment, and in this case, the clustering of activity at these strikes points to a strategic positioning ahead of year-end. Traders may be seeking to capitalise on potential catalysts such as quarterly results, sector developments, or broader economic factors influencing the automobile industry.

Sector and Broader Market Comparison

Within the automobile sector, Tata Motors Passenger Vehicles’ relative outperformance on the day underscores its appeal amid a mixed market environment. The sector’s modest 0.52% gain contrasts with the stock’s near 2% rise, highlighting its ability to attract investor interest. The Sensex’s 0.57% return provides a benchmark for overall market movement, with Tata Motors Passenger Vehicles exceeding this benchmark by a significant margin.

This relative strength may be linked to company-specific news flow, investor sentiment, or technical factors influencing trading volumes and option positioning. The automobile sector’s cyclical nature and sensitivity to economic indicators make such movements noteworthy for market participants monitoring sector rotation and stock selection.

Outlook and Considerations for Investors

While the active call option trading suggests a degree of optimism, investors should consider the broader context of Tata Motors Passenger Vehicles’ price action and sector dynamics. The stock’s position below longer-term moving averages indicates that it remains within a consolidation or correction phase on a medium to long-term basis. However, the short-term momentum and rising delivery volumes point to increased investor engagement and potential for directional moves.

Market participants may wish to monitor upcoming corporate announcements, sector developments, and macroeconomic indicators that could influence the automobile industry’s trajectory. The options market activity provides a useful barometer of sentiment but should be analysed alongside fundamental and technical factors for a comprehensive view.

In summary, Tata Motors Passenger Vehicles is currently a focal point for derivatives traders, with significant call option volumes at strikes near the current market price. This activity reflects a cautious but constructive stance on the stock’s near-term prospects as the December expiry approaches.

Summary of Key Metrics

• Underlying stock price: ₹352.45

• Most active call strikes: ₹350 and ₹360

• Contracts traded at ₹350 strike: 8,763

• Contracts traded at ₹360 strike: 12,443

• Open interest at ₹350 strike: 8,764

• Open interest at ₹360 strike: 13,315

• Turnover at ₹350 strike: ₹450.07 lakhs

• Turnover at ₹360 strike: ₹252.84 lakhs

• Market cap: ₹1,27,372 crore

• Delivery volume on 18 Dec: 78.81 lakh shares (83.81% above 5-day average)

• Stock 1-day return: 1.89%

• Sector 1-day return: 0.52%

• Sensex 1-day return: 0.57%

Investors and traders should continue to observe the evolving options market activity and price trends in Tata Motors Passenger Vehicles as the expiry date approaches, to gauge shifts in market sentiment and potential trading opportunities.

Only Rs. 14,999 - Get MojoOne + Stock of the Week for 1 Year PLUS 18 Months FREE! Start Saving Now →