Tata Steel Sees Heavy Put Option Activity Amid Bullish Price Momentum

Put Option Activity Highlights

On 10 Feb 2026, Tata Steel Ltd witnessed exceptional put option volumes expiring on 24 Feb 2026. The strike prices of ₹205 and ₹200 attracted the highest number of contracts, with 3,954 and 5,571 contracts traded respectively. The turnover for these strikes was substantial, amounting to ₹81.77 crores for the ₹205 strike and ₹69.25 crores for the ₹200 strike. Open interest figures further underscore the market’s focus on these levels, with 944 contracts open at ₹205 and a notably higher 2,106 contracts at ₹200.

The underlying stock price stood at ₹209.23, placing the ₹205 and ₹200 strikes just below the current market price. This concentration of put options suggests a strategic positioning by market participants, potentially as a hedge against near-term downside risk or as a bearish bet anticipating a correction.

Price Performance and Market Context

Contrary to the heavy put option activity, Tata Steel’s stock price has been on a strong upward trajectory. The stock hit a new 52-week high of ₹211.10 on the day, outperforming its sector by 1.7% and the broader Sensex by 2.56%. Over the past two trading sessions, Tata Steel has delivered a cumulative return of 5.74%, reflecting sustained investor confidence.

Technical indicators reinforce this bullish momentum. Tata Steel is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a well-established uptrend. Additionally, delivery volumes surged to 2.18 crore shares on 09 Feb, an 85.68% increase over the five-day average, indicating rising investor participation and conviction.

Liquidity remains robust, with the stock’s traded value supporting sizeable trade sizes up to ₹13.61 crores based on 2% of the five-day average traded value. This liquidity profile facilitates active trading and efficient price discovery, crucial for both institutional and retail investors.

Interpreting the Put Option Surge

The pronounced activity in put options at strikes ₹205 and ₹200, both slightly out-of-the-money relative to the current price, suggests a dual narrative. On one hand, investors may be employing puts as a protective hedge to safeguard recent gains amid heightened market volatility. On the other, speculative traders could be positioning for a potential pullback, anticipating profit-taking or sector-specific headwinds.

Given Tata Steel’s market capitalisation of ₹2,56,224 crores and its classification as a large-cap stock within the ferrous metals sector, such option activity is closely watched as a barometer of market sentiment. The company’s Mojo Score of 75.0 and a current Mojo Grade of Buy, recently downgraded from Strong Buy on 01 Jan 2026, reflect a cautious but positive outlook from analysts.

Sector and Benchmark Comparison

In comparison to the ferrous metals sector’s 1.31% gain and the Sensex’s modest 0.36% rise on the same day, Tata Steel’s 3.17% one-day return underscores its relative strength. This outperformance is notable given the sector’s cyclical nature and sensitivity to global commodity prices and demand fluctuations.

Investors should consider the broader macroeconomic environment, including steel demand forecasts, raw material cost trends, and geopolitical factors influencing supply chains. These elements could impact Tata Steel’s near-term earnings and, by extension, option market positioning.

Expiry Patterns and Investor Behaviour

The expiry date of 24 Feb 2026 for the active put options is significant, as it falls within a critical earnings and budgetary announcement window for the company and the sector. Traders often adjust their option positions ahead of such events to manage risk or capitalise on expected volatility.

The open interest build-up at the ₹200 strike, more than double that at ₹205, may indicate a stronger conviction around this level as a key support or a target for downside protection. This concentration could also reflect institutional hedging strategies, where large shareholders seek to mitigate potential losses without liquidating equity holdings.

Outlook and Investor Considerations

While the surge in put option volumes might initially suggest bearish sentiment, the concurrent price strength and technical indicators point to a more nuanced scenario. Investors should interpret the heavy put activity as a sign of prudent risk management rather than outright pessimism.

For long-term investors, Tata Steel’s fundamentals remain compelling, supported by its large-cap status, sector leadership, and positive Mojo Score. However, the recent downgrade from Strong Buy to Buy signals a need for vigilance amid evolving market conditions.

Traders and portfolio managers should monitor option open interest and volume trends closely, especially as the 24 Feb expiry approaches, to gauge shifts in market expectations. Combining option market data with price action and fundamental analysis will provide a comprehensive view of Tata Steel’s risk-reward profile.

Summary

Tata Steel Ltd’s position as the most active stock in put options trading highlights the dynamic interplay between bullish price momentum and cautious hedging strategies. With significant put volumes clustered at ₹205 and ₹200 strikes and a strong underlying price performance, the stock exemplifies how sophisticated investors balance optimism with risk mitigation in a volatile market environment.

As the expiry date nears, market participants will be watching closely for any shifts in option positioning that could presage changes in price direction or volatility. Meanwhile, Tata Steel’s robust fundamentals and sector leadership continue to make it a key stock for investors focused on the ferrous metals industry.

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