Adani Green Energy Sees Surging Put Option Activity Amid Sharp Price Decline

Heavy Put Option Trading Highlights Bearish Outlook

On 23 January 2026, Adani Green Energy’s put options with a strike price of ₹800 emerged as the most actively traded contracts in the derivatives segment. A total of 16,287 contracts exchanged hands, generating a turnover of ₹1,587.98 lakhs. The open interest for these puts stands at 537 contracts, indicating sustained interest in downside protection or speculative bearish bets as the expiry date approaches.

The underlying stock closed at ₹797.30, just 4.21% above its 52-week low of ₹758, underscoring the fragile price environment. The put strike price of ₹800 is strategically positioned near the current market price, making it a critical level for traders anticipating further declines or seeking to hedge existing long positions.

Price Action and Volatility Reflect Market Nervousness

Adani Green Energy’s stock price plunged by 13.63% on the day, significantly underperforming the power sector’s decline of 3.2% and the broader Sensex’s modest fall of 0.77%. The stock touched an intraday low of ₹785, marking a 13.19% drop from the previous close, and traded within a wide range of ₹124, highlighting elevated volatility. The weighted average price of traded volumes skewed towards the lower end of the day’s range, signalling selling pressure.

Intraday volatility, calculated at 10.92%, is notably high, reflecting the unsettled market sentiment. Furthermore, Adani Green is trading below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—indicating a persistent downtrend and weak technical momentum.

Sectoral and Market Context

The power generation and distribution sector has also faced headwinds, with a 3.2% decline on the day. However, Adani Green’s underperformance is stark in comparison, suggesting company-specific concerns or intensified bearish positioning. Investor participation appears to be waning, as delivery volumes dropped by 36.41% compared to the five-day average, signalling reduced conviction among buyers.

Despite the large market capitalisation of ₹1,29,006.84 crores, the stock’s liquidity remains adequate for sizeable trades, with a 2% threshold of the five-day average traded value supporting trade sizes up to ₹3.98 crores. This liquidity facilitates active options trading and allows institutional players to implement hedging strategies efficiently.

Mojo Score and Ratings Reflect Deteriorating Fundamentals

Adani Green Energy’s current Mojo Score stands at 21.0, categorised as a Strong Sell, a downgrade from its previous Sell rating on 5 January 2026. This downgrade reflects deteriorating financial metrics, weak price momentum, and negative trend assessments. The company’s market cap grade is rated 1, indicating a large-cap stock with significant market presence but currently facing adverse investor sentiment.

The downgrade and bearish technical signals align with the surge in put option activity, suggesting that market participants are positioning for further downside or protecting existing holdings against potential losses.

Expiry Patterns and Strategic Implications

The expiry date of 27 January 2026 is just days away, intensifying the focus on the ₹800 strike puts. The concentration of open interest near this strike price indicates a key support level that traders are watching closely. Should the stock breach this level decisively, it could trigger accelerated selling pressure and further put buying as downside protection.

Conversely, if the stock stabilises above ₹800, some of the bearish positioning may unwind, potentially leading to a short-covering rally. However, given the current technical and fundamental backdrop, the balance of probabilities favours continued caution.

Investor Strategies: Hedging and Speculation

Heavy put option volumes often serve dual purposes: hedging existing long positions to limit downside risk and speculative bets on price declines. Institutional investors and hedge funds may be employing these puts to mitigate exposure amid volatile market conditions and sectoral weakness.

Retail investors, too, might be attracted to put options as a cost-effective way to express bearish views or protect portfolios without outright selling shares. The liquidity and active trading in these contracts facilitate such strategies.

Conclusion: Bearish Sentiment Dominates Ahead of Expiry

Adani Green Energy Ltd’s pronounced put option activity, combined with its sharp price decline and technical weakness, paints a clear picture of bearish investor sentiment. The stock’s proximity to its 52-week low and the concentration of open interest at the ₹800 strike price suggest that market participants are bracing for further downside or actively hedging against it.

Investors should closely monitor price action around the upcoming expiry on 27 January 2026, as a breach of key support levels could accelerate selling pressure. Meanwhile, the stock’s deteriorating Mojo Score and sector underperformance reinforce the need for caution.

For those seeking alternatives, analytical tools highlight other opportunities within the power sector and beyond, offering potentially superior risk-reward profiles based on comprehensive fundamental and momentum assessments.

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