Vodafone Idea Ltd Sees Surge in Call Option Activity Amid Bullish Sentiment

Robust Call Option Activity Highlights Investor Optimism

On 31 December 2025, Vodafone Idea Ltd. emerged as the most active stock in call options trading, with the 12-strike call expiring on 27 January 2026 attracting significant interest. A total of 3,419 contracts changed hands, generating a turnover of ₹1,075.24 lakhs. Open interest in this strike price stood at 7,713 contracts, underscoring sustained bullish sentiment among option traders.

The underlying stock price at the time was ₹11.22, just below the 12-strike call option, suggesting that investors are positioning for a potential upside move in the near term. This activity is particularly noteworthy given Vodafone Idea’s current Mojo Grade of Sell (46.0), which was upgraded from Strong Sell on 17 October 2025, indicating a cautious but improving outlook.

Price Performance and Technical Indicators

Vodafone Idea’s stock price delivered a strong one-day return of 4.37% on 31 December, outperforming the telecom sector’s 0.99% gain and the Sensex’s modest 0.15% rise. This outperformance reflects growing investor confidence, possibly driven by expectations of operational improvements or sector tailwinds.

Technically, the stock is trading above its 50-day, 100-day, and 200-day moving averages, signalling a medium- to long-term uptrend. However, it remains below its 5-day and 20-day moving averages, indicating some short-term consolidation or profit-taking. This mixed technical picture suggests that while the broader trend is positive, near-term volatility may persist.

Rising Investor Participation and Liquidity

Investor participation has surged dramatically, with delivery volume reaching 67.4 crore shares on 31 December, a 251.4% increase compared to the five-day average. This spike in delivery volume highlights strong conviction among buyers willing to hold shares rather than trade intraday.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹26.01 crore based on 2% of the five-day average. This liquidity profile is favourable for institutional investors and traders seeking to build or unwind positions without significant market impact.

Fundamental and Market Cap Considerations

Vodafone Idea Ltd. operates within the Telecom - Services industry and is classified as a mid-cap stock with a market capitalisation of approximately ₹1,16,577 crore. Despite the recent upgrade from Strong Sell to Sell, the company’s Mojo Score of 46.0 reflects ongoing challenges in profitability and operational metrics.

The Market Cap Grade of 2 indicates moderate size relative to peers, which may limit institutional interest compared to larger telecom players. However, the improving technicals and heightened options activity suggest that some investors are anticipating a turnaround or strategic developments that could enhance shareholder value.

Expiry Patterns and Strategic Positioning

The concentration of call option activity at the 12-strike price for the 27 January 2026 expiry is a key indicator of market expectations. Investors appear to be betting on the stock crossing this threshold within the next four weeks, which would represent a gain of approximately 7% from the current price.

This expiry cycle is critical as it coincides with the company’s upcoming quarterly results and potential regulatory announcements that could influence the stock’s trajectory. The elevated open interest and turnover in call options suggest that traders are positioning for a positive catalyst or a technical breakout.

Risks and Balanced Outlook

While the surge in call option activity and recent price gains are encouraging, Vodafone Idea Ltd. remains a stock with considerable risks. The telecom sector is highly competitive, and the company faces ongoing challenges related to debt servicing, market share erosion, and regulatory pressures.

Investors should weigh the bullish signals from options markets against these fundamental headwinds. The current Sell rating and modest Mojo Score imply that caution is warranted, and any upside may be tempered by broader sector dynamics and company-specific developments.

Implications for Investors and Traders

The heightened call option activity in Vodafone Idea Ltd. offers valuable insights for market participants. Traders may view the 12-strike call options as a cost-effective way to gain leveraged exposure to potential upside, while long-term investors might interpret the improved technicals and rising delivery volumes as signs of stabilisation.

However, given the company’s current Sell rating and the telecom sector’s inherent volatility, a prudent approach would involve monitoring upcoming earnings and regulatory updates closely. Investors should also consider diversification and risk management strategies to mitigate downside risks.

Conclusion

Vodafone Idea Ltd.’s recent surge in call option trading, combined with its outperformance relative to sector and benchmark indices, signals a cautiously optimistic market stance. While fundamental challenges persist, the options market activity suggests that investors are positioning for a potential rebound in the near term.

Careful analysis of technical indicators, expiry patterns, and liquidity conditions supports a view that Vodafone Idea remains a stock to watch, particularly for those seeking exposure to the evolving Indian telecom landscape. Nonetheless, the Sell Mojo Grade and moderate Market Cap Grade counsel measured optimism and thorough due diligence.

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