Strong Call Option Interest Signals Market Confidence
Varun Beverages, a major player in the beverages industry with a market capitalisation of approximately ₹1,63,113.32 crores, has attracted notable attention in the call options segment. The most actively traded call options are concentrated around the 480 and 500 strike prices, both expiring on 30 December 2025.
Specifically, the 480 strike call options recorded 4,405 contracts traded, generating a turnover of ₹704.81 lakhs, with an open interest of 1,594 contracts. Meanwhile, the 500 strike call options saw 3,105 contracts traded, with a turnover of ₹247.61 lakhs and a higher open interest of 5,010 contracts. These figures indicate a strong positioning by market participants anticipating upward price movement beyond these strike levels.
The underlying stock price at the time stood at ₹480.65, placing the 480 strike call options at-the-money and the 500 strike slightly out-of-the-money. The elevated open interest at the 500 strike suggests that investors are positioning for a potential rally above this level by the December expiry.
Recent Price Performance Supports Bullish Sentiment
Varun Beverages has outperformed its sector by 1.51% on the day, registering a 3.21% gain compared to the sector’s 1.51% and the Sensex’s marginal 0.07% rise. The stock has demonstrated a four-day consecutive gain, accumulating returns of 7.5% over this period. Intraday, the stock touched a high of ₹481.35, reflecting a 3.01% increase.
Technical indicators show the stock trading above its 5-day, 20-day, 50-day, and 100-day moving averages, although it remains below the 200-day moving average. This pattern often indicates short- to medium-term strength while suggesting some resistance at longer-term levels.
However, investor participation has shown signs of moderation, with delivery volume on 27 November falling by 62.13% to 16.5 lakh shares compared to the five-day average. Despite this, liquidity remains sufficient, with the stock capable of supporting trade sizes up to ₹5.52 crores based on 2% of the five-day average traded value.
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Expiry Patterns and Strike Price Concentration
The concentration of call option activity at the 480 and 500 strike prices for the 30 December expiry highlights investor focus on the stock’s near-term price trajectory. The 480 strike, being close to the current market price, suggests traders are hedging or speculating on moderate upside moves, while the 500 strike’s significant open interest points to expectations of a more pronounced rally.
Open interest levels provide insight into the positions held by traders and can indicate potential support or resistance zones. The higher open interest at the 500 strike compared to the 480 strike may imply that market participants are more confident in the stock breaching the 500 level before expiry.
Market Capitalisation and Sector Context
As a large-cap stock within the beverages sector, Varun Beverages holds a prominent position with a market cap exceeding ₹1.6 lakh crores. The sector itself has shown resilience, with Varun Beverages outperforming its peers on recent trading sessions. This relative strength is reflected in the derivatives market, where call option volumes and open interest levels underscore a bullish market assessment.
Investors and traders often use options data as a barometer for market sentiment. The active call option trading in Varun Beverages suggests that participants are positioning for continued momentum, possibly driven by favourable industry trends, company fundamentals, or broader market conditions.
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Implications for Investors and Traders
The active call option market for Varun Beverages provides valuable insights for investors and traders alike. The volume and open interest data suggest a prevailing bullish sentiment, with market participants anticipating upward price movement by the end of December.
For investors, this may signal confidence in the company’s near-term prospects within the beverages sector, which has demonstrated steady performance. Traders can interpret the strike price concentrations and expiry timelines as indicators of potential price targets and volatility expectations.
It is also noteworthy that despite the recent gains and positive momentum, the stock remains below its 200-day moving average, which could act as a resistance level. This technical factor may influence the pace and sustainability of any further advances.
Moreover, the decline in delivery volume suggests some caution or profit-taking among longer-term holders, even as short-term trading activity remains robust. This dynamic highlights the importance of monitoring both derivatives and cash market data to form a comprehensive view.
Conclusion
Varun Beverages is currently a key focus in the options market, with substantial call option activity concentrated at the 480 and 500 strike prices for the December expiry. The stock’s recent outperformance relative to its sector and the Sensex, combined with strong derivatives market positioning, reflects a broadly bullish market assessment.
Investors and traders should consider these factors alongside technical indicators and liquidity conditions when evaluating Varun Beverages’ near-term outlook. The interplay of option market data and price action offers a nuanced perspective on market expectations for this large-cap beverages stock.
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