Vedanta Ltd Sees Robust Call Option Activity Amid Mixed Price Momentum

Robust Call Option Volumes Highlight Investor Sentiment

On 21 January 2026, Vedanta Ltd. (stock code 801588) recorded heavy call option volumes, particularly at the ₹680 and ₹700 strike prices for the 27 January expiry. The ₹680 strike saw 6,637 contracts traded, generating a turnover of ₹665.56 lakhs and an open interest of 6,026 contracts. Meanwhile, the ₹700 strike attracted 5,898 contracts with a turnover of ₹245.53 lakhs and an open interest of 3,881 contracts. These figures underscore a strong bullish bias among options traders, who appear to be positioning for a potential price rally above the current underlying value of ₹663.90.

The concentration of open interest and turnover at these strikes suggests that market participants are betting on Vedanta’s price to move closer to or beyond these levels by expiry. The ₹680 strike, in particular, stands out as the most actively traded call option, indicating a key resistance level that investors are closely monitoring.

Price Performance and Technical Context

Despite the bullish options activity, Vedanta’s spot price has experienced a mild pullback, closing down by 1.06% on the day and underperforming its sector by 2.35%. The stock has declined for three consecutive sessions, losing 1.97% over this period. However, it remains resilient above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling underlying strength in the medium to long term.

Vedanta is currently trading just 2.8% below its 52-week high of ₹688, indicating that the stock is near a significant resistance zone. The recent dip may represent a consolidation phase before a potential breakout, which aligns with the bullish sentiment reflected in the call option market.

Market Capitalisation and Liquidity Profile

As a large-cap stock with a market capitalisation of ₹2,60,040.81 crores, Vedanta commands substantial investor interest and liquidity. The stock’s delivery volume on 20 January was 71.94 lakh shares, although this represented a 25.08% decline compared to the five-day average delivery volume, suggesting some short-term investor caution. Nevertheless, the stock remains liquid enough to support sizeable trades, with a 2% threshold of the five-day average traded value equating to approximately ₹35.75 crores.

Dividend Yield and Investor Appeal

Vedanta offers a relatively attractive dividend yield of 3.42% at current prices, which adds to its appeal for income-focused investors. This yield, combined with the stock’s large-cap status and sector leadership, supports a positive medium-term outlook despite recent volatility.

Mojo Score and Rating Update

MarketsMOJO assigns Vedanta a Mojo Score of 78.0, categorising it as a Buy. This rating reflects a slight downgrade from a previous Strong Buy grade issued on 13 January 2026, signalling a cautious but still favourable view of the stock’s prospects. The downgrade may be attributed to the recent price softness and sector underperformance, but the overall fundamentals and technical indicators remain supportive.

Expiry Patterns and Market Implications

The expiry date of 27 January 2026 is fast approaching, and the elevated open interest at the ₹680 and ₹700 call strikes suggests that traders are positioning for a potential price move in the coming week. The clustering of open interest near these strikes often leads to price pinning or volatility as expiry nears, as market makers and investors adjust their hedges and positions.

Given Vedanta’s proximity to its 52-week high and the strong technical support from moving averages, the stock could experience a breakout if positive catalysts emerge, such as favourable commodity prices or sector developments. Conversely, failure to breach these strike levels may result in a short-term pullback or consolidation.

Sector and Industry Context

Vedanta operates within the Non-Ferrous Metals industry, a sector that is sensitive to global commodity cycles, currency fluctuations, and geopolitical developments. The sector has shown mixed performance recently, with Vedanta underperforming its peers by 2.35% on the day. However, the stock’s strong fundamentals, large market cap, and liquidity position it well to capitalise on any sector rebound.

Investor Takeaway

Investors should closely monitor Vedanta’s price action in the coming days, especially as the 27 January expiry approaches. The heavy call option activity at strikes above the current price indicates optimism for a near-term rally, but the recent three-day decline and sector underperformance warrant caution. Maintaining a balanced view that considers both the technical support levels and the broader market environment will be key to making informed investment decisions.

Overall, Vedanta remains a compelling large-cap stock with a solid dividend yield and a favourable Mojo Score, supported by strong option market positioning. The stock’s ability to sustain above key moving averages and approach its 52-week high will be critical signals for future direction.

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