Asian Paints Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Asian Paints’ Recent Market Performance and Technical Context

Asian Paints Ltd. (NSE: ASIANPAINT), with a market capitalisation of ₹2,51,924 crores, has been under pressure in recent sessions. The stock has declined by 5.88% on 28 January 2026, underperforming its sector by 2.72% and the broader Sensex, which gained 0.52% on the same day. Over the past three trading days, Asian Paints has lost 8.56%, reflecting a clear downtrend. The stock opened with a gap down of 3.35% and touched an intraday low of ₹2,451, representing a 6.55% fall from the previous close.

Technically, Asian Paints is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – indicating sustained weakness. The weighted average price for the day was closer to the low, suggesting selling pressure dominated throughout the session. Investor participation has risen notably, with delivery volumes on 27 January reaching 13.82 lakh shares, an 86.48% increase over the five-day average, signalling heightened trading interest amid the decline.

Put Option Activity Highlights Bearish Sentiment

The most active put options for Asian Paints are concentrated around strike prices near and slightly above the current underlying value of ₹2,482.3. The expiry date for these options is 24 February 2026, less than a month away, which adds urgency to the positioning.

Key put strikes and their trading metrics include:

• ₹2,400 strike: The most heavily traded put option with 5,142 contracts, generating a turnover of ₹558.04 lakhs and an open interest of 1,876 contracts.
• ₹2,460 strike: 2,802 contracts traded, turnover of ₹455.75 lakhs, open interest at 612 contracts.
• ₹2,480 strike: 2,145 contracts traded, turnover of ₹390.93 lakhs, open interest of 585 contracts.
• ₹2,440 strike: 1,522 contracts traded, turnover of ₹220.61 lakhs, open interest of 465 contracts.
• ₹2,600 strike: Surprisingly high activity with 2,081 contracts traded, turnover of ₹729.96 lakhs, and open interest of 902 contracts, indicating some investors are hedging against a more significant downside or using this strike for strategic positioning.

The concentration of put option volume and open interest at strikes below and near the current price suggests that market participants are bracing for further declines or are actively hedging existing long positions. The ₹2,400 strike, in particular, stands out as a critical level where investors expect potential support or a target for downside moves.

Implications of Put Option Trends for Investors

The surge in put option activity at multiple strikes indicates a cautious or bearish stance among traders and institutional investors. This could be driven by concerns over near-term earnings, sectoral headwinds, or broader market volatility. Asian Paints’ downgrade from a 'Buy' to a 'Hold' rating on 16 January 2026, reflected in its Mojo Score of 67.0, may have contributed to the shift in sentiment.

Investors utilising put options may be seeking to hedge long equity exposure or speculate on further price declines. The elevated open interest at the ₹2,400 and ₹2,460 strikes suggests these levels are viewed as significant support zones or potential targets for downside moves. The relatively high turnover at the ₹2,600 strike, above the current price, could indicate protective puts purchased as insurance against a sharp correction.

Sectoral and Market Context

The paints sector itself has been under pressure, declining by 3.4% on the day, with Asian Paints underperforming the sector by nearly 2.7%. This sectoral weakness, combined with the stock’s technical breakdown, has likely intensified bearish positioning. Despite the large market cap and liquidity – with the stock able to handle trade sizes of approximately ₹9.67 crores based on recent volumes – the current environment favours defensive strategies.

Given the stock’s fall below all major moving averages and the rising delivery volumes, the technical outlook remains cautious. Investors should monitor the 24 February expiry closely, as option expiry dynamics could influence price volatility in the coming weeks.

Outlook and Strategic Considerations

For investors holding Asian Paints shares, the current put option activity signals a need for caution. The stock’s technical deterioration and sectoral weakness suggest downside risks remain elevated in the near term. Those with long positions may consider protective puts or tightening stop-loss levels to manage risk effectively.

Conversely, traders looking to capitalise on volatility might explore put spreads or other option strategies to benefit from potential declines while limiting downside exposure. The concentration of open interest near ₹2,400 and ₹2,460 strikes offers potential reference points for tactical positioning.

Fundamental investors should also weigh the recent downgrade from 'Buy' to 'Hold' and the Mojo Grade of 67.0, which reflects a neutral stance on the stock’s near-term prospects. While Asian Paints remains a large-cap leader in the paints industry, the current market environment calls for selective exposure and disciplined risk management.

Conclusion

Asian Paints Ltd. is currently experiencing heightened put option activity, underscoring a bearish or hedging bias among market participants. The stock’s recent price weakness, technical breakdown, and sectoral underperformance have combined to create a cautious trading environment. Investors should closely monitor option expiry dynamics on 24 February 2026 and consider protective strategies to navigate the prevailing volatility.

With the stock trading below all major moving averages and delivery volumes rising sharply, the risk-reward balance favours prudence. Market participants are advised to stay alert to evolving price action and option market signals as they assess their exposure to this large-cap paints sector heavyweight.

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