Open Interest and Volume Dynamics
The latest data reveals that Tata Steel’s open interest (OI) in futures and options contracts rose sharply to 61,159 contracts, up 12.12% from the previous 54,547 contracts. This increase of 6,612 contracts indicates a strong build-up of positions by market participants. Concurrently, the trading volume stood at 60,146 contracts, closely matching the open interest, which suggests active participation and fresh inflows rather than mere position squaring.
In monetary terms, the futures segment’s value reached ₹1,25,293.81 lakhs, while the options segment exhibited an enormous notional value of ₹59,946,474,335 lakhs, cumulatively amounting to ₹1,40,284.39 lakhs in total derivatives value. Such substantial figures underscore the intense speculative and hedging interest surrounding Tata Steel’s stock.
Price Performance and Technical Strength
Tata Steel’s underlying share price has been on an upward trajectory, recently touching an intraday high of ₹216.45, marking a fresh 52-week peak. The stock outperformed its sector by 0.69% on the day, with a 3.03% gain compared to the sector’s 2.61% and the Sensex’s modest 0.38% rise. Notably, the stock has recorded gains for two consecutive sessions, delivering a cumulative return of 3.79% over this period.
Technically, Tata Steel is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bullish momentum. This technical strength is further supported by the steel sector’s overall gain of 2.56%, reflecting positive industry tailwinds.
Market Positioning and Investor Behaviour
The surge in open interest coupled with rising prices typically indicates fresh long positions being established, suggesting that traders are betting on further upside. However, delivery volumes have declined slightly, with a 4.02% drop in delivery volume to 1.24 crore shares on 24 Feb compared to the five-day average. This divergence between derivatives activity and physical delivery volumes may imply that short-term traders and institutional participants are driving the recent momentum rather than retail investors holding shares for the long term.
Liquidity remains ample, with the stock’s average traded value supporting trade sizes up to ₹13.19 crore, ensuring that large institutional trades can be executed without significant price impact. This liquidity is crucial for sustaining the elevated open interest levels and accommodating increased speculative activity.
Our current Stock of the Month is out! This Large Cap from Automobiles - Passenger Cars emerged as the single best opportunity from our elite universe. Get the details now!
- - Current monthly selection
- - Single best opportunity
- - Elite universe pick
Mojo Score and Analyst Ratings
Tata Steel currently holds a Mojo Score of 75.0, reflecting a strong buy recommendation, although this represents a slight downgrade from its previous “Strong Buy” grade as of 01 Jan 2026. The company’s market cap stands at a robust ₹2,64,588 crore, categorising it firmly as a large-cap stock within the ferrous metals industry.
The downgrade from “Strong Buy” to “Buy” may reflect cautious optimism among analysts, possibly due to valuation concerns or near-term sector headwinds. Nonetheless, the stock’s recent price action and derivatives activity suggest that market participants remain confident in Tata Steel’s growth prospects and operational resilience.
Sectoral Context and Broader Market Implications
The ferrous metals sector, including steel, sponge iron, and pig iron, has gained 2.56% recently, buoyed by improving demand fundamentals and easing raw material costs. Tata Steel’s outperformance relative to its sector peers highlights its leadership position and ability to capitalise on favourable market conditions.
Given the stock’s strong technical setup and rising open interest, investors should monitor for potential continuation of the bullish trend. However, the slight decline in delivery volumes warrants caution, as it may indicate that the rally is currently driven more by speculative flows than by sustained accumulation by long-term holders.
Tata Steel Ltd caught your attention? Explore our comprehensive research report with in-depth analysis of this large-cap Ferrous Metals stock – fundamentals, valuations, financials, and technical outlook!
- - Comprehensive research report
- - In-depth large-cap analysis
- - Valuation assessment included
Potential Directional Bets and Outlook
The sharp rise in open interest, combined with the stock’s new 52-week high and strong volume, suggests that traders are positioning for further upside in Tata Steel. The derivatives market activity points to a predominance of long positions, which could fuel momentum if the broader steel sector continues to strengthen.
However, investors should remain vigilant for any signs of profit-taking or sector-specific risks such as fluctuations in global steel prices, input cost volatility, or regulatory changes. The recent downgrade in analyst rating also implies that valuations may be stretched, warranting a balanced approach.
Overall, Tata Steel’s current market positioning and technical indicators favour a cautiously optimistic outlook, with the potential for continued gains supported by strong fundamentals and sector tailwinds.
Summary
Tata Steel Ltd’s derivatives market has experienced a notable surge in open interest, reflecting increased speculative and institutional interest. The stock’s price strength, hitting a new 52-week high and outperforming its sector, is underpinned by solid volume and liquidity. While delivery volumes have softened slightly, the overall market positioning suggests bullish sentiment with investors betting on further appreciation. The company’s Mojo Score of 75.0 and “Buy” rating reinforce its appeal as a large-cap ferrous metals stock, though investors should weigh valuation considerations and sector dynamics carefully.
Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today
