Robust Call Option Activity Highlights Investor Optimism
On 29 December 2025, Tata Steel Ltd witnessed an impressive volume of 15,411 call option contracts traded at the ₹175 strike price, expiring on 30 December 2025. This activity generated a turnover of ₹762.84 lakhs, reflecting heightened speculative interest and hedging demand. The open interest at this strike stands at 3,604 contracts, indicating sustained investor commitment to bullish bets as the expiry approaches.
The underlying stock closed at ₹173.46, just shy of the ₹175 strike, suggesting that market participants are positioning for a potential upside breakout in the near term. The concentration of call options at this strike price underscores expectations of a rally beyond current levels.
Price Performance and Technical Strength
Tata Steel’s stock price demonstrated resilience, touching an intraday high of ₹174.13, a gain of 2.96% on the day. This outperformance was notable against the ferrous metals sector’s 1.48% rise and the Sensex’s marginal decline of 0.14%. The stock’s 1-day return of 2.44% further confirms positive momentum.
Technically, Tata Steel is trading above its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a strong uptrend. This alignment of moving averages often attracts momentum traders and institutional investors, reinforcing the bullish sentiment.
However, delivery volumes have seen a decline, with 89.71 lakh shares delivered on 26 December 2025, down 23.76% against the 5-day average. This dip in investor participation could suggest some caution or profit-booking among longer-term holders, even as short-term traders ramp up call option positions.
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Fundamental Strength and Market Capitalisation
Tata Steel Ltd, a large-cap company with a market capitalisation of ₹2,16,527 crores, operates in the ferrous metals industry, a sector that has shown signs of recovery amid improving global demand and stabilising raw material costs. The company’s Mojo Score of 77.0 and an upgraded Mojo Grade from Hold to Buy as of 9 December 2025 reflect improved fundamentals and positive outlook from MarketsMOJO’s analytical framework.
The Market Cap Grade of 1 further confirms Tata Steel’s standing as a heavyweight in its sector, attracting institutional interest and liquidity. The stock’s liquidity profile supports trade sizes up to ₹7.43 crores based on 2% of the 5-day average traded value, making it accessible for large-scale investors and traders alike.
Expiry Patterns and Strategic Positioning
The concentration of call option activity at the ₹175 strike price, just above the current market price, suggests that traders are anticipating a breakout in the final trading session before expiry. The expiry date of 30 December 2025 is critical, as it coincides with the end of the calendar year, a period often marked by portfolio rebalancing and window dressing by fund managers.
Open interest data reveals that the ₹175 strike has attracted significant accumulation, which could lead to a gamma squeeze if the stock price moves decisively above this level. Such dynamics often result in accelerated price moves as option writers hedge their positions.
Sectoral Context and Comparative Performance
Within the ferrous metals sector, Tata Steel’s outperformance by 1.1% relative to peers highlights its relative strength. The sector has been buoyed by improving steel demand domestically and internationally, alongside easing input cost pressures. Tata Steel’s ability to outperform its sector and the broader Sensex index amid mixed market conditions underscores its robust positioning.
Investors should note that while the short-term technical and options data point to bullishness, the recent decline in delivery volumes warrants cautious monitoring of investor sentiment in the coming sessions.
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Investor Takeaway and Outlook
The surge in call option volumes and open interest at the ₹175 strike price for Tata Steel Ltd signals a clear bullish bias among traders anticipating a price rally in the immediate term. The stock’s technical strength, combined with an upgraded Mojo Grade to Buy and a strong fundamental backdrop, supports this positive outlook.
However, investors should remain vigilant of the declining delivery volumes, which may indicate some profit-taking or reduced conviction among long-term holders. The expiry on 30 December 2025 will be a key event to watch, as it may trigger volatility and directional moves depending on how the stock price interacts with the strike price levels.
Overall, Tata Steel Ltd remains a compelling large-cap stock within the ferrous metals sector, offering both growth potential and liquidity for active traders and investors alike.
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