Tata Motors Passenger Vehicles Sees Surge in Call Option Activity Amid Mixed Technical Signals

Robust Call Option Activity Highlights Investor Sentiment

On the expiry date of 30 Dec 2025, TMPV recorded the most active call options with 4,299 contracts traded at the ₹370 strike price. This activity generated a turnover of approximately ₹3.10 lakhs and an open interest of 8,597 contracts, indicating sustained interest in bullish bets on the stock. The underlying stock price stood at ₹360.55, just shy of the strike price, suggesting traders are positioning for a potential upside move in the near term.

The concentration of call option volume at this strike price is significant given the stock’s recent performance and technical indicators. The open interest level reflects a sizeable pool of outstanding contracts, which could translate into increased volatility as expiry approaches, especially if the stock price moves closer to or beyond the ₹370 level.

Price and Technical Trends Paint a Mixed Picture

TMPV’s price action on 30 Dec 2025 showed a 0.54% gain, outperforming the automobile sector’s 0.62% rise marginally and contrasting with the Sensex’s slight decline of 0.02%. Notably, the stock reversed a three-day losing streak, signalling a potential short-term recovery. However, the technical landscape remains nuanced: the share price is trading above its 5-day and 20-day moving averages but remains below the longer-term 50-day, 100-day, and 200-day averages. This pattern suggests that while short-term momentum is positive, the broader trend remains under pressure.

Investor participation appears to be waning, with delivery volumes on 29 Dec falling sharply by 62.05% compared to the five-day average, registering 63.18 lakh shares. This decline in delivery volume may indicate reduced conviction among long-term holders, even as speculative interest in call options rises.

Fundamental and Market Context

Tata Motors Passenger Vehicles Ltd is a large-cap company with a market capitalisation of ₹1,32,048 crores, operating within the automobile sector. Despite its size and industry standing, the company’s MarketsMOJO score currently stands at 36.0, with a Sell grade assigned on 4 Nov 2024, downgraded from Hold. This rating reflects concerns over the company’s near-term prospects, possibly influenced by sectoral headwinds or company-specific challenges.

Implications of Elevated Call Option Interest

The surge in call option contracts at the ₹370 strike price suggests that traders are anticipating a rebound or a breakout above this level before expiry. Given the underlying price of ₹360.55, the strike price represents a roughly 2.6% premium, which is a reasonable target for short-term bullish traders.

Options traders often use call options to leverage upside potential while limiting downside risk, and the high open interest indicates that many investors are either initiating new bullish positions or rolling over existing ones. This activity could be driven by expectations of positive catalysts such as new product launches, favourable policy developments, or sectoral recovery.

However, the mixed technical signals and the recent downgrade by MarketsMOJO counsel caution. The stock’s failure to breach longer-term moving averages suggests resistance levels that may cap gains. Additionally, the sharp decline in delivery volumes points to a lack of strong institutional conviction, which could limit sustained upward momentum.

Sector and Market Comparison

Within the automobile sector, TMPV’s performance on 30 Dec 2025 was slightly below the sector’s 0.62% gain, despite outperforming the Sensex. This relative underperformance aligns with the company’s Sell rating and low Mojo Score, indicating that while the sector may be recovering, TMPV faces specific challenges.

Investors should also consider the broader market environment, which remains volatile with mixed signals from key indices. The Sensex’s marginal decline contrasts with the sector’s modest gains, highlighting sector-specific dynamics that could influence TMPV’s trajectory.

Investor Takeaways and Outlook

For investors and traders, the heightened call option activity in Tata Motors Passenger Vehicles Ltd signals a cautious optimism about a near-term price recovery. The ₹370 strike price is a key level to watch, as a sustained move above this could trigger further bullish momentum and potentially attract more buying interest.

Nevertheless, the downgrade to a Sell rating and the low Mojo Score of 36.0 suggest that fundamental and technical headwinds remain. Investors should weigh the speculative nature of the call option surge against the broader market context and the company’s recent performance metrics.

Liquidity remains adequate, with the stock’s trading volume supporting trades up to ₹8.08 crores based on 2% of the five-day average traded value. This ensures that investors can enter or exit positions without significant market impact, an important consideration given the current volatility.

In summary, while the call option market reflects bullish sentiment, the overall outlook for TMPV remains mixed. Investors should monitor price action around the ₹370 strike price and consider the company’s fundamental challenges before committing to sizeable positions.

Conclusion

Tata Motors Passenger Vehicles Ltd’s recent surge in call option trading highlights a speculative bet on a price rebound, despite a cautious technical and fundamental backdrop. The stock’s performance relative to sector and market indices, combined with its downgrade and low Mojo Score, suggests that investors should approach with prudence. The coming days will be critical in determining whether the bullish options positioning translates into sustained price gains or if resistance levels and fundamental concerns will prevail.

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