Vedanta Ltd Sees Surge in Call Option Activity Amid Bullish Sentiment

Robust Call Option Volumes Reflect Investor Optimism

On 8 January 2026, Vedanta Ltd. (stock code: 801588) emerged as one of the most actively traded stocks in the call options segment. The most significant activity was concentrated on contracts expiring on 27 January 2026, with strike prices at ₹640 and ₹650. Specifically, the ₹650 strike call option saw 10,048 contracts traded, generating a turnover of ₹351.28 lakhs and an open interest of 3,923 contracts. Meanwhile, the ₹640 strike call option recorded 9,302 contracts traded, with a turnover of ₹554.12 lakhs and open interest of 1,769 contracts.

This elevated volume in call options, particularly at strike prices above the current underlying value of ₹597.95, suggests that traders are positioning for a price appreciation in the near term. The open interest figures further reinforce this bullish stance, indicating that market participants are not merely trading for short-term gains but are holding positions anticipating upward movement.

Price Action and Technical Indicators

Despite the bullish options activity, Vedanta’s stock price experienced a decline of 3.98% on the day, underperforming the Sensex which fell by 0.43%, but outperforming its sector, which dropped 4.93%. The stock touched an intraday low of ₹598.7, reflecting some profit-taking after two consecutive days of gains. Notably, the weighted average price of traded shares was closer to the day’s low, indicating selling pressure at higher levels.

From a technical perspective, Vedanta’s share price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it is currently trading below its 5-day moving average, suggesting short-term consolidation or correction. This mixed technical picture aligns with the cautious optimism seen in the options market, where investors are selectively bullish but mindful of near-term volatility.

Sectoral Context and Investor Participation

The non-ferrous metals sector, to which Vedanta belongs, has been under pressure, declining by 4.92% on the same day. Vedanta’s relative outperformance within this challenging environment underscores its resilience and the confidence investors place in its fundamentals. The company’s market capitalisation stands at a substantial ₹2,36,970 crores, categorising it firmly as a large-cap stock with significant liquidity and institutional interest.

Investor participation has notably increased, with delivery volumes rising to 63.98 lakh shares on 7 January 2026, a 66.57% increase compared to the five-day average. This surge in delivery volume indicates genuine buying interest rather than speculative trading, which bodes well for the stock’s medium-term prospects.

Fundamental Strength Underpinning Positive Outlook

Vedanta Ltd. carries a strong fundamental rating, reflected in its Mojo Score of 81.0 and a Mojo Grade upgrade from Buy to Strong Buy as of 1 December 2025. This upgrade signals improved financial health, operational efficiency, and favourable valuation metrics. The company also boasts a high dividend yield of 3.7% at current prices, adding to its appeal for income-focused investors.

Its Market Cap Grade is rated 1, indicating a large-cap status with robust market presence and liquidity. These factors contribute to the confidence investors have in Vedanta’s ability to navigate sectoral headwinds and capitalise on growth opportunities in the non-ferrous metals industry.

Expiry Patterns and Strike Price Preferences

The concentration of call option activity around the 27 January 2026 expiry date suggests that traders are focusing on short- to medium-term catalysts. The preference for strike prices at ₹640 and ₹650, which are approximately 7% to 8.5% above the current underlying price, indicates expectations of a meaningful price rally within the next three weeks.

Open interest data reveals that the ₹650 strike has nearly double the open interest compared to the ₹640 strike, highlighting a stronger conviction at the higher strike price. This may reflect anticipation of positive news flow, improved commodity prices, or favourable earnings results that could drive the stock price beyond these levels.

Risks and Market Considerations

While the bullish positioning is evident, investors should remain cautious given the recent price volatility and sectoral weakness. The stock’s decline on the day, coupled with trading volumes weighted near the low price, suggests that short-term profit-taking or technical corrections could persist. Additionally, macroeconomic factors such as commodity price fluctuations, regulatory changes, and global demand dynamics remain key risks for the non-ferrous metals sector.

Nevertheless, the combination of strong fundamentals, rising investor participation, and active call option interest points to a constructive outlook for Vedanta Ltd. in the coming weeks.

Conclusion: A Stock Poised for Recovery Amid Bullish Sentiment

Vedanta Ltd.’s recent surge in call option trading activity, particularly at strike prices above the current market level, underscores a growing bullish consensus among investors. Supported by a strong fundamental upgrade to a Strong Buy rating and increased delivery volumes, the stock appears well-positioned to capitalise on sectoral recovery and favourable market conditions.

While short-term price fluctuations and sectoral pressures may temper immediate gains, the overall outlook remains positive. Investors seeking exposure to the non-ferrous metals space should monitor Vedanta’s price action closely, as the options market signals potential upside in the near term.

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