Vedanta Ltd Sees Surge in Call Option Activity Ahead of January Expiry

Robust Call Option Volumes Signal Investor Optimism

Data from the derivatives market reveals that Vedanta Ltd. (stock code: 801588) has emerged as the most active stock in call options trading, with significant volumes concentrated at strike prices of ₹700 and ₹720 for the expiry on 27 January 2026. The ₹700 strike call options recorded 6,333 contracts traded, generating a turnover of ₹68.24 crores and an open interest of 9,327 contracts. Meanwhile, the ₹720 strike calls saw even higher activity with 7,258 contracts traded, turnover of ₹35.64 crores, and an open interest of 2,870 contracts.

These figures underscore a strong bullish positioning, as traders are betting on the stock price rising above these strike levels within the next week. The underlying stock closed at ₹676.50, just 0.95% shy of its 52-week high of ₹688, indicating that the market is pricing in a potential breakout.

Technical Strength Bolsters Positive Outlook

Vedanta’s technical indicators further reinforce the optimistic stance. The stock is trading above its key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained upward momentum. This technical strength is complemented by the stock’s outperformance relative to its sector, with a 1-day return of 0.40% compared to the sector’s decline of 0.39% and the Sensex’s fall of 0.50% on the same day.

Despite a slight dip of 0.12% on the day, the stock’s resilience near its yearly highs suggests that investors remain confident in Vedanta’s medium-term prospects. The company’s large market capitalisation of ₹2,63,893 crores and a high dividend yield of 3.41% add to its appeal as a stable investment within the Non-Ferrous Metals industry.

Open Interest and Turnover Patterns Reflect Strategic Positioning

The open interest data reveals a concentration of positions at the ₹700 strike, with 9,327 contracts outstanding, indicating that traders are holding onto bullish bets as expiry approaches. The ₹720 strike, while having lower open interest at 2,870 contracts, has seen higher daily trading volumes, suggesting active repositioning and speculative interest at this higher strike price.

Turnover figures also highlight the significant capital flow into these call options, with a combined turnover exceeding ₹103 crores on the expiry day. This level of activity is indicative of strong market conviction and a willingness to pay premiums for upside exposure.

Investor Participation and Liquidity Considerations

While Vedanta’s delivery volume on 19 January 2026 was 77.78 lakh shares, this represented a 14.72% decline against the 5-day average delivery volume, signalling a slight reduction in investor participation in the cash segment. However, the stock remains sufficiently liquid, with the ability to support trade sizes of up to ₹34.18 crores based on 2% of the 5-day average traded value, ensuring that institutional and retail investors can transact without significant price impact.

This liquidity, combined with the active options market, provides a robust framework for investors seeking to implement various trading strategies, including bullish call spreads or outright call buying to capitalise on anticipated price appreciation.

Fundamental Strength Underpins Positive Market Sentiment

Vedanta Ltd. continues to maintain a strong fundamental profile, reflected in its Mojo Score of 78.0 and a current Mojo Grade of Buy, following a recent downgrade from Strong Buy on 13 January 2026. This slight moderation in rating reflects a cautious stance amid broader market volatility but does not detract from the company’s solid earnings prospects and sector leadership.

The company’s position in the Non-Ferrous Metals industry, coupled with its large-cap status and consistent dividend yield, makes it a preferred choice for investors seeking exposure to the metals cycle recovery. The recent call option activity aligns with this fundamental backdrop, as market participants position themselves for potential upside driven by commodity price trends and operational efficiencies.

Expiry Dynamics and Market Expectations

With the 27 January 2026 expiry date fast approaching, the concentration of call option activity at strikes above the current market price suggests that traders are anticipating a positive catalyst or sustained momentum in Vedanta’s shares. The proximity to the 52-week high adds credence to the possibility of a breakout, potentially driven by favourable commodity prices or company-specific developments.

Investors should monitor open interest changes closely in the coming days to gauge whether these bullish positions are being unwound or further accumulated. Additionally, the interplay between call and put option volumes will provide insights into the overall market sentiment and risk appetite surrounding Vedanta Ltd.

Balancing Risks and Rewards

While the bullish call option activity is encouraging, investors must remain mindful of the inherent risks in derivatives trading and the volatility of commodity-linked stocks. Vedanta’s recent slight downgrade in Mojo Grade and the dip in delivery volumes highlight the need for cautious optimism. Market participants should consider hedging strategies or staggered entry points to manage downside risks effectively.

Overall, the current derivatives market data, combined with Vedanta’s technical and fundamental strengths, paints a compelling picture for investors looking to capitalise on potential upside in the Non-Ferrous Metals sector.

Conclusion

Vedanta Ltd.’s surge in call option trading ahead of the January expiry reflects a growing bullish consensus among investors, supported by strong technical indicators and solid fundamentals. The concentration of activity at ₹700 and ₹720 strike prices, coupled with robust turnover and open interest, signals expectations of a near-term price rally. While some caution is warranted given recent rating adjustments and delivery volume trends, the stock’s proximity to its 52-week high and attractive dividend yield make it a noteworthy candidate for investors seeking exposure to the metals sector’s recovery.

Market participants should continue to monitor option market dynamics and underlying stock performance closely to capitalise on emerging opportunities while managing associated risks prudently.

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