Union Bank of India Sees Robust Call Option Activity Amid Bullish Market Momentum

Strong Call Option Trading Highlights Bullish Sentiment

On 2 December 2025, Union Bank of India’s call options with a strike price of ₹160 and expiry on 30 December 2025 recorded the highest trading volume among active contracts. A total of 4,589 contracts exchanged hands, generating a turnover of approximately ₹1019.38 lakhs. The open interest for these contracts stands at 1,749, indicating sustained interest and positioning by market participants.

The underlying stock price was ₹159.20 at the time, just shy of the ₹160 strike price, which was also the new 52-week high reached during intraday trading. This proximity to the strike price suggests that traders are positioning for a potential upward move in the stock before the expiry date.

Price Performance and Market Context

Union Bank of India’s stock performance on the day reflected a positive trend, with the share price touching an intraday high of ₹160, representing a 3.77% rise. The stock outperformed its sector by 2.56% and the broader Sensex index, which recorded a marginal decline of 0.33%. Over the last two trading sessions, the stock has delivered a cumulative return of 4.16%, signalling sustained buying interest.

Technical indicators also support the bullish momentum, as the stock is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This alignment across multiple timeframes often reflects a strong upward trend and investor confidence in the stock’s near-term prospects.

Liquidity and Dividend Yield Considerations

Liquidity remains adequate for Union Bank of India, with the stock’s traded value supporting trade sizes up to ₹2.85 crores based on 2% of the 5-day average traded value. However, investor participation measured by delivery volume showed a decline of 15.48% compared to the 5-day average, with 38.56 lakh shares delivered on 1 December. This could indicate some profit booking or cautious positioning despite the positive price action.

Investors may also find the stock attractive due to its dividend yield of 3.05% at the current price level, which is relatively high for the banking sector. This yield provides an additional income component alongside potential capital appreciation.

Market Capitalisation and Sector Positioning

Union Bank of India is classified as a large-cap stock with a market capitalisation of approximately ₹1,21,969.75 crores. Operating within the public sector banking industry, the bank’s performance is often viewed as a barometer for the broader PSU banking segment. The recent price and options activity may reflect a shift in market assessment towards the bank’s growth and stability prospects amid evolving economic conditions.

While the stock has shown resilience, it is important to note that the delivery volume decline suggests some investors may be adopting a cautious stance. This mixed participation could be a response to broader macroeconomic factors or sector-specific developments.

Expiry Patterns and Strike Price Focus

The concentration of call option trades at the ₹160 strike price with expiry on 30 December 2025 highlights a key level of interest for traders. The strike price aligns closely with the current market price, indicating that market participants are anticipating the stock to maintain or surpass this level in the near term. Open interest figures reinforce this view, as they represent outstanding contracts that have yet to be exercised or closed.

Such activity often precedes significant price movements, as traders adjust their positions in response to market developments and upcoming corporate announcements. The expiry date also plays a crucial role, as it sets a timeline for these expectations to materialise.

Implications for Investors and Traders

The active call option trading in Union Bank of India suggests a prevailing bullish sentiment among derivatives traders, who appear to be positioning for a potential price appreciation in the coming weeks. This is supported by the stock’s recent price performance, technical indicators, and dividend yield, which collectively contribute to its appeal.

However, the decline in delivery volume signals that some investors may be exercising caution, possibly awaiting further clarity on sectoral or macroeconomic developments. As such, market participants should consider both the positive momentum and the tempered investor participation when evaluating their positions.

Given the stock’s large-cap status and role within the public sector banking industry, movements in Union Bank of India often have broader implications for the sector and market sentiment. Monitoring option expiry patterns and strike price concentrations can provide valuable insights into market expectations and potential price trajectories.

Conclusion

Union Bank of India’s recent surge in call option activity, coupled with its price reaching a new 52-week high, underscores a notable shift in market assessment. The stock’s performance relative to its sector and the Sensex, alongside strong technical positioning, reflects a constructive outlook among traders and investors. While some caution is evident in delivery volumes, the overall market dynamics suggest that Union Bank of India remains a key stock to watch in the public sector banking space as the December expiry approaches.

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