Tata Steel Ltd Sees Significant Open Interest Surge Amid Bullish Momentum

Open Interest and Volume Dynamics

On 25 Feb 2026, Tata Steel Ltd’s open interest (OI) in futures and options contracts rose sharply by 6,471 contracts, an 11.86% increase from the previous day’s 54,547 to 61,018. This substantial uptick in OI was accompanied by a robust trading volume of 76,227 contracts, reflecting heightened activity in the derivatives market. The futures value stood at ₹1,69,815.87 lakhs, while the options segment exhibited an enormous notional value of approximately ₹74,840.24 crores, culminating in a total derivatives value of ₹1,88,352.93 lakhs.

The underlying stock price closed at ₹214, having touched a fresh 52-week high intraday of ₹216.45, marking a 3.5% gain on the day. This price appreciation outperformed the ferrous metals sector, which gained 2.02%, and the broader Sensex, which rose a modest 0.22%. Tata Steel’s outperformance was further underscored by its 2-day consecutive gains, delivering a cumulative return of 2.74% over this period.

Technical and Market Positioning Insights

Tata Steel is currently trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a strong uptrend and positive momentum. The stock’s market capitalisation stands at a commanding ₹2,64,588 crore, categorising it as a large-cap heavyweight within the ferrous metals industry.

Despite the bullish price action and rising OI, delivery volumes have seen a slight decline. On 24 Feb, the delivery volume was 1.24 crore shares, down 4.02% against the 5-day average delivery volume. This suggests that while short-term speculative interest is rising, longer-term investor participation has moderated slightly, possibly indicating that traders are positioning for near-term directional moves rather than long-term accumulation.

Interpreting the Open Interest Surge

The 11.86% increase in open interest alongside rising prices typically points to fresh buying interest and the initiation of long positions by market participants. This is often interpreted as a bullish signal, as new money flows into the market betting on further upside. The substantial volume in futures and options contracts supports this view, indicating active hedging and speculative strategies.

Moreover, the futures value of ₹1,69,815.87 lakhs and the colossal options value highlight the significant capital allocation towards Tata Steel derivatives, reflecting confidence in the stock’s near-term prospects. The combination of rising OI, increasing price, and strong volume suggests that traders are positioning for continued strength in Tata Steel’s shares.

Sectoral Context and Comparative Performance

The ferrous metals sector, encompassing steel, sponge iron, and pig iron, has gained 2.02% on the day, reflecting a broad-based recovery driven by improving demand prospects and easing raw material costs. Tata Steel’s 2.49% day gain and 2.18% one-day return outpaced the sector average and the Sensex, underscoring its leadership within the space.

Its Mojo Score of 75.0 and a current Mojo Grade of Buy (downgraded from Strong Buy on 1 Jan 2026) reflect a solid fundamental and technical outlook, supported by strong market cap grade (1) and liquidity metrics. The stock’s liquidity, based on 2% of the 5-day average traded value, supports trade sizes up to ₹13.19 crore, making it accessible for institutional and retail investors alike.

Potential Directional Bets and Market Sentiment

The surge in open interest combined with rising prices and volumes suggests that market participants are increasingly bullish on Tata Steel’s near-term trajectory. The derivatives market activity points to a build-up of long positions, possibly anticipating further price appreciation driven by improving steel demand, margin expansion, or positive earnings revisions.

However, the slight dip in delivery volumes indicates caution among long-term holders, who may be trimming exposure or awaiting confirmation of sustained momentum. This divergence between derivatives activity and delivery participation is typical in volatile or transitional phases, where speculative interest leads price action before broader investor conviction sets in.

Investors should monitor upcoming quarterly results, global steel price trends, and domestic infrastructure developments, which could act as catalysts for Tata Steel’s stock performance. Additionally, tracking open interest changes in key strike prices and expiry dates will provide further clues on market positioning and sentiment.

Conclusion: A Bullish Outlook with Cautious Optimism

The recent surge in Tata Steel Ltd’s open interest and volume in the derivatives market, coupled with its strong price performance and technical positioning, signals a bullish market consensus. The stock’s ability to sustain above key moving averages and hit new 52-week highs reinforces this positive outlook.

Nonetheless, the slight decline in delivery volumes suggests that some investors remain cautious, highlighting the importance of monitoring fundamental developments and broader market conditions. For investors and traders, Tata Steel presents an attractive opportunity within the ferrous metals sector, supported by solid liquidity, favourable valuations, and improving market sentiment.

As always, prudent risk management and continuous analysis of open interest trends and price action will be key to capitalising on this momentum while mitigating downside risks.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →