Vedanta Ltd Sees Surge in Call Option Activity Amid Bullish Sentiment

Strong Call Option Volumes Highlight Investor Sentiment

On 1 February 2026, Vedanta Ltd. (NSE: VEDL) recorded robust trading volumes in call options expiring on 24 February 2026. The ₹650 strike call option saw 10,235 contracts traded, generating a turnover of ₹4,113.7 lakhs, while the ₹700 strike call option led with 11,543 contracts traded and a turnover of ₹2,190.3 lakhs. Open interest data further underscores this trend, with the ₹700 strike call holding 4,387 contracts open, significantly higher than the ₹650 strike’s 1,318 contracts. This concentration at higher strike prices suggests that market participants are positioning for upside potential beyond the current underlying price of ₹662.6.

Price Action and Technical Context

Despite the bullish options activity, Vedanta’s stock price has experienced a challenging phase. The share has declined for two consecutive sessions, falling by 13.5% over this period. On 1 February, the stock opened sharply lower, down 6.83%, and touched an intraday low of ₹613.4, representing a 10% drop from the previous close. The weighted average traded price skewed closer to the day’s low, indicating selling pressure during the session.

Technically, Vedanta’s price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it currently trades below its 5-day moving average, reflecting short-term weakness. This divergence suggests a potential consolidation phase before any decisive directional move.

Sector and Market Comparison

The Non-Ferrous Metals sector has underperformed recently, with a sector decline of 8.94% on the day, while Vedanta outperformed its peers by 6.33%. The broader Sensex index was relatively flat, gaining 0.19%, highlighting sector-specific headwinds. Vedanta’s relative resilience amid sector weakness may be attracting speculative interest in call options as investors anticipate a sector recovery or company-specific catalysts.

Fundamental and Market Metrics

Vedanta Ltd. boasts a large market capitalisation of ₹2,53,530 crores, categorising it as a large-cap stock with high liquidity. The stock’s delivery volume on 30 January surged to 2.16 crore shares, a 115.5% increase over the five-day average, indicating rising investor participation. Additionally, Vedanta offers a dividend yield of 3.37%, which is attractive in the current market environment and may support investor confidence.

Mojo Score Upgrade Reflects Improving Fundamentals

MarketsMOJO recently upgraded Vedanta Ltd.’s Mojo Grade from Hold to Buy on 13 January 2026, reflecting an improved outlook based on fundamental and technical assessments. The company’s Mojo Score stands at a robust 75.0, signalling strong buy-side interest. Despite the recent price softness, the upgrade suggests that the stock’s underlying quality and growth prospects have strengthened, encouraging investors to accumulate positions.

Options Expiry and Strike Price Dynamics

The expiry date of 24 February 2026 is attracting significant open interest, particularly at the ₹700 strike price, which is approximately 5.6% above the current underlying price. This indicates that traders are betting on a meaningful price appreciation within the next three weeks. The ₹650 strike, slightly below the current price, also shows substantial activity, possibly reflecting hedging strategies or spread trades.

Open interest at the ₹700 strike is more than three times that at ₹650, suggesting a stronger conviction in a rally beyond ₹700. The high turnover in these call options, amounting to over ₹6,300 lakhs combined, highlights the liquidity and active participation in Vedanta’s options market.

Investor Implications and Outlook

For investors, the surge in call option volumes at elevated strike prices signals a cautiously optimistic market stance. While the stock has faced short-term selling pressure, the underlying technical support and fundamental upgrades provide a foundation for potential recovery. The elevated open interest at ₹700 strike price calls suggests that market participants expect Vedanta to regain momentum and possibly surpass this level by expiry.

However, the recent price weakness and sector headwinds warrant a measured approach. Investors should monitor price action around key moving averages and watch for confirmation of a trend reversal before committing significant capital. The attractive dividend yield and rising delivery volumes add to the stock’s appeal for longer-term investors seeking income and growth.

Conclusion: Navigating Volatility with Strategic Positioning

Vedanta Ltd.’s options market activity reveals a nuanced picture of investor sentiment. The heavy call option volumes at strikes above the current price reflect bullish expectations, even as the stock contends with short-term volatility and sector challenges. The recent upgrade to a Buy rating by MarketsMOJO and the company’s strong fundamentals support a positive medium-term outlook.

Investors should weigh the technical signals and sector dynamics carefully, considering the stock’s liquidity and dividend yield as additional factors. The coming weeks, leading up to the 24 February expiry, will be critical in determining whether Vedanta can capitalise on this bullish positioning and deliver gains for shareholders.

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