Rs 200 and Rs 210 Puts Draw Over 5,000 Contracts on Adani Power Ltd Ahead of 29 Sep Expiry

Put Options Event and Cash Market Context

The 29 September expiry saw 2,478 contracts traded at the Rs 200 strike and 2,684 contracts at Rs 210, amounting to a combined turnover of approximately ₹752.6 lakhs. The underlying stock price stood at Rs 213.32, placing the Rs 210 strike just 1.1% out-of-the-money (OTM) and the Rs 200 strike about 6.3% below the current market price. Open interest for these strikes was 1,188 and 1,639 contracts respectively, indicating that a significant portion of the traded contracts represent fresh positioning rather than mere rollovers.

The stock itself has been on a steady upward trajectory, gaining 4.38% over the past three sessions and outperforming its sector by 2.81% today. It opened with a gap-up of 2.83% and touched an intraday high of Rs 213.28, trading in a narrow range of just Rs 0.66. This price action suggests a firming bullish sentiment in the cash market, which adds nuance to the interpretation of the put activity — is this put buying a hedge or a bearish bet?

Strike Price Analysis: Moneyness and Intent

The Rs 210 strike, being just 1.1% below the current price, is effectively at-the-money (ATM) and likely to be the focal point for protective strategies. The Rs 200 strike, 6.3% out-of-the-money, sits near a technical support zone, roughly aligning with the stock’s 50-day moving average, which currently lies above the Rs 200 level. This proximity to a key moving average suggests that the Rs 200 puts may serve as a hedge against a moderate pullback rather than a bet on a sharp decline.

Put options that are OTM on a rising stock often indicate hedging activity, where investors seek to protect unrealised gains. Conversely, ATM or in-the-money (ITM) puts tend to signal directional bearish bets. In this case, the Rs 210 strike’s near-ATM status combined with the stock’s recent gains points towards a protective stance rather than outright bearish conviction — could this be a classic example of hedging in a volatile sector?

Interpreting the Put Activity: Hedging, Bearish Positioning, or Put Writing?

Three interpretations are plausible for the observed put activity. First, the put contracts could be bought as a hedge by investors holding long positions in Adani Power Ltd, aiming to protect against a short-term correction after recent gains. Second, the activity might represent bearish positioning, with traders speculating on a price decline to or below the Rs 210 or Rs 200 levels by expiry. Third, the put contracts could be sold (put writing), where sellers collect premium expecting the stock to remain above these strikes, reflecting a bullish outlook.

Given the stock’s steady rise over the past three days and its position above the 5-day, 20-day, and 200-day moving averages, the hedging interpretation carries more weight. The Rs 210 strike’s proximity to the current price and the Rs 200 strike’s alignment with a support zone reinforce this view. Put writing is less likely here due to the relatively high open interest and turnover, which suggest active buying rather than premium collection. Bearish bets would typically be more concentrated at or below the current price during a downtrend, which is not the case.

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest is approximately 2.1:1 for the Rs 210 strike and 2.1:1 for the Rs 200 strike, indicating that the majority of activity is fresh rather than adjustments of existing positions. This fresh positioning supports the notion of new hedging activity or directional bets being established. However, the stock’s positive momentum and rising delivery volumes suggest that the fresh put buying is more likely protective than bearish.

Cash Market Momentum and Technical Alignment

Adani Power Ltd is trading above its 5-day, 20-day, and 200-day moving averages but remains below the 50-day and 100-day averages. This mixed moving average configuration often signals a consolidation phase within an overall uptrend. The Rs 200 put strike roughly corresponds to the 50-day moving average support, which is a common level for investors to hedge against a pullback. Delivery volumes have risen by 58.41% compared to the five-day average, indicating increased investor participation and lending credibility to the recent price gains. The combination of rising prices and increased delivery volume suggests that the rally is supported by genuine buying interest, which tempers the bearish interpretation of the put activity.

Delivery Volume and Market Quality

Delivery volume on 26 August was 78.96 lakh shares, a 58.41% increase over the five-day average, signalling strong investor participation. This rise in delivery volume alongside a rally suggests that the price gains are backed by genuine demand rather than speculative trading. The increased delivery volume may be a factor prompting investors to hedge their positions with puts, as the rally, while supported, could face profit-taking or short-term volatility. This dynamic further supports the protective interpretation of the put activity rather than outright bearish speculation.

Conclusion: Protective Hedging Dominates Put Activity

The combined analysis of strike prices, open interest, contract volumes, and the cash market context suggests that the heavy put activity on Adani Power Ltd is predominantly protective hedging rather than outright bearish positioning. The Rs 210 and Rs 200 strikes serve as safety nets for investors seeking to shield gains amid a rally that is supported by rising delivery volumes and positive momentum. While some directional bearish bets cannot be ruled out entirely, the data points more strongly to a cautious optimism among market participants.

With the stock trading above key short-term moving averages and fresh put buying concentrated at strikes just below the current price, should investors consider this a signal to hedge or a warning of deeper weakness ahead?

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