Tata Steel Ltd Sees Surge in Call Option Activity Ahead of January Expiry

Surge in Call Option Trading Highlights Investor Confidence

The most active call option for Tata Steel Ltd is the January 27, 2026 expiry with a strike price of ₹180. On this contract, a substantial 6,271 contracts were traded, generating a turnover of approximately ₹1790.06 lakhs. Open interest stands at 3,855 contracts, indicating sustained investor interest and potential accumulation ahead of the expiry date.

With the underlying stock price at ₹179.15, the ₹180 strike call options are positioned just at-the-money, making them attractive for traders anticipating a price breakout. The high volume and turnover in these calls suggest a strong directional bet on the stock moving higher in the coming weeks.

Price Performance and Technical Strength

Tata Steel Ltd closed the day just 4.14% shy of its 52-week high of ₹186.94, underscoring its robust price momentum. The stock has gained 6.14% over the last three consecutive trading sessions, reflecting sustained buying interest. Despite underperforming its sector by 0.52% on the day, Tata Steel opened with a gap-up of 2.39%, touching an intraday high of ₹181.40, a 3.19% rise from the previous close.

Technically, Tata Steel is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a strong uptrend. This technical strength aligns with the bullish sentiment evident in the options market.

Sectoral Context and Market Capitalisation

The ferrous metals sector, encompassing steel, sponge iron, and pig iron, has gained 2.42% recently, providing a supportive backdrop for Tata Steel’s rally. The company’s large-cap status, with a market capitalisation of ₹2,19,398 crores, adds to its appeal among institutional investors seeking stable growth opportunities in cyclical sectors.

Investor participation has also risen notably, with delivery volumes on 30 December reaching 1.73 crore shares — a 32.14% increase compared to the five-day average. This heightened liquidity supports the active trading seen in both the cash and derivatives segments.

Mojo Score Upgrade Reflects Improving Fundamentals

MarketsMOJO has upgraded Tata Steel Ltd’s Mojo Grade from Hold to Buy as of 9 December 2025, reflecting improved fundamentals and positive outlook. The company’s Mojo Score stands at a healthy 77.0, signalling strong quality and growth prospects. Despite a market cap grade of 1, indicating a very large capitalisation, the stock continues to demonstrate agility in price movements and investor interest.

This upgrade is supported by Tata Steel’s consistent earnings growth, operational efficiencies, and favourable sector dynamics, which have collectively enhanced its investment appeal.

Options Market Sentiment and Expiry Patterns

The concentration of call option activity at the ₹180 strike price for the January 2026 expiry suggests that traders are positioning for a breakout above this level. The open interest of 3,855 contracts, combined with the high turnover, indicates that many investors are either initiating fresh bullish bets or rolling over existing positions to maintain exposure.

Such activity often precedes significant price moves, as option traders hedge or speculate on anticipated catalysts such as quarterly earnings, policy announcements, or sectoral developments. Given Tata Steel’s proximity to its 52-week high and strong technical indicators, the options market is signalling confidence in further upside potential.

Liquidity and Trading Viability

Tata Steel’s liquidity remains robust, with the stock’s traded value supporting a trade size of approximately ₹9.67 crores based on 2% of the five-day average traded value. This liquidity ensures that both institutional and retail investors can enter or exit positions without significant price impact, an important consideration for active options traders.

The delivery volume spike further confirms that investors are not merely trading intraday but are willing to hold positions, reinforcing the conviction behind the bullish sentiment.

Balancing Risks and Rewards

While the bullish call option activity and technical strength are encouraging, investors should remain mindful of sector cyclicality and global commodity price volatility, which can impact steel prices and margins. Tata Steel’s performance is also sensitive to raw material costs and regulatory changes, factors that could introduce near-term headwinds.

Nonetheless, the current market positioning, supported by strong delivery volumes and a positive upgrade in Mojo Grade, suggests that the stock is well placed to capitalise on favourable market conditions. Investors with a medium-term horizon may find the current levels attractive for accumulation, especially given the stock’s proximity to its 52-week high and the momentum in the options market.

Conclusion

Tata Steel Ltd’s active call option trading, particularly at the ₹180 strike for the January 2026 expiry, highlights a clear bullish bias among market participants. Supported by strong price momentum, technical indicators, and an upgrade in fundamental ratings, the stock is poised for potential gains in the near term. However, investors should weigh sector risks and maintain a balanced approach to capitalise on this opportunity effectively.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Today