Zydus Lifesciences Sees Surge in Call Option Activity Amid Bullish Momentum

Robust Call Option Activity Highlights Investor Sentiment

On 26 February 2026, Zydus Lifesciences (stock code 290229) recorded an impressive 4,397 contracts traded in call options with a strike price of ₹950, set to expire on 30 March 2026. This activity generated a turnover of ₹876.15 lakhs, underscoring significant investor interest in the stock’s upside potential. The open interest for these contracts stands at 1,144, indicating sustained positions rather than short-term speculative trades.

The underlying stock price was ₹938.00 at the time, placing the ₹950 strike price just above the current market level, which suggests traders are positioning for a moderate rally in the coming month. This is further supported by the stock’s recent performance, which has outpaced the Pharmaceuticals & Biotechnology sector by 1.26% on the day, with a 1.84% gain compared to the sector’s 0.66% and the Sensex’s 0.21%.

Price Momentum and Technical Indicators

Zydus Lifesciences has demonstrated positive momentum, with the stock gaining 3.83% over the last two trading sessions. It touched an intraday high of ₹947.55, a 3.03% increase, signalling strong buying interest. The stock’s price currently trades above its 5-day, 20-day, 50-day, and 100-day moving averages, although it remains below the 200-day moving average, indicating a medium-term resistance level that investors will be watching closely.

Investor participation has also surged, with delivery volumes on 25 February reaching 3.51 lakh shares, a 104.92% increase compared to the five-day average. This heightened liquidity supports the active options market and suggests that institutional and retail investors alike are increasing their exposure to Zydus Lifesciences.

Mojo Grade Downgrade and Market Capitalisation Context

Despite the bullish options activity, Zydus Lifesciences was downgraded from a Hold to a Sell mojo grade on 1 December 2025, with a current mojo score of 48.0. The downgrade reflects concerns over certain fundamental metrics and valuation pressures within the mid-cap pharmaceutical sector. The company holds a market capitalisation of approximately ₹93,600 crores, placing it firmly in the mid-cap category with a market cap grade of 2.

Investors should weigh this downgrade against the recent price momentum and options market optimism. The divergence between fundamental ratings and market sentiment often presents trading opportunities, especially in a sector as dynamic as pharmaceuticals and biotechnology.

Expiry Patterns and Strike Price Analysis

The expiry date of 30 March 2026 is a key focal point for traders, as the concentration of call options at the ₹950 strike price suggests a consensus target just above the current trading level. This strike price is strategically chosen, balancing the risk-reward profile for bullish investors who anticipate a moderate price appreciation within the next month.

Open interest data reveals that the ₹950 strike is the most actively held call option, indicating that traders expect the stock to breach this level or at least trade close to it by expiry. This pattern is consistent with a cautious but optimistic outlook, where investors are not betting on a sharp rally but rather a steady upward trend.

Comparative Sector and Market Performance

In comparison to the broader Pharmaceuticals & Biotechnology sector, which has seen modest gains, Zydus Lifesciences’ outperformance is notable. The sector’s 1-day return stands at 0.66%, while Zydus Lifesciences has delivered a 1.84% gain. This relative strength is a positive signal for traders looking to capitalise on sector rotation or stock-specific catalysts.

Moreover, the Sensex’s marginal 0.21% increase on the same day highlights that Zydus Lifesciences is outperforming the broader market, reinforcing the bullish sentiment reflected in the options market.

Investor Takeaways and Outlook

For investors and traders, the surge in call option activity at the ₹950 strike price ahead of the 30 March expiry signals a cautiously bullish stance on Zydus Lifesciences. The stock’s recent price gains, coupled with rising delivery volumes and outperformance relative to its sector and the Sensex, provide a supportive backdrop for this optimism.

However, the mojo grade downgrade to Sell and the stock’s position below the 200-day moving average warrant a measured approach. Investors should monitor upcoming quarterly results, sector developments, and broader market trends to validate the sustainability of this momentum.

Options traders, in particular, may find opportunities in the current elevated open interest and turnover, but should remain vigilant to volatility around expiry dates and strike price levels.

Conclusion

Zydus Lifesciences Ltd’s prominence as the most active call option stock reflects a nuanced market view: bullish on near-term price appreciation but tempered by fundamental concerns. The ₹950 strike price for the 30 March 2026 expiry encapsulates this sentiment, with significant contracts traded and open interest signalling strong investor conviction. As the expiry approaches, market participants will be closely watching price action and volume trends to gauge whether this momentum can be sustained or if a correction is imminent.

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