Asian Paints Sees Heavy Put Option Activity Amid Bearish Sentiment

Intense Put Option Trading Highlights Bearish Sentiment

On 27 January 2026, Asian Paints saw 7,095 put contracts traded at the ₹2,600 strike price, generating a turnover of ₹24.19 crores. This activity is notable given the underlying stock price of ₹2,615.30, indicating that traders are positioning for a potential downside or hedging existing long positions. Open interest for this expiry and strike stands at 989 contracts, underscoring sustained interest in downside protection.

Looking further ahead to the 24 February 2026 expiry, put option activity intensifies. At the ₹2,500 strike, 8,459 contracts changed hands, with turnover reaching ₹95.80 crores and open interest at 999 contracts. More strikingly, the ₹2,600 strike for the same expiry recorded 12,354 contracts traded, with a massive turnover of ₹244.61 crores and open interest swelling to 1,501 contracts. This concentration of put activity at strikes close to the current market price suggests a pronounced bearish outlook or strategic hedging by institutional investors.

Stock Performance and Technical Context

Asian Paints has underperformed its sector marginally, with a 1-day return of -1.26% compared to the paints sector’s -1.50% and the Sensex’s near-flat -0.06%. The stock has been on a two-day losing streak, shedding 1.09% cumulatively. Despite this short-term weakness, the share price remains above its 100-day and 200-day moving averages, signalling underlying medium- to long-term strength. However, it currently trades below its 5-day, 20-day, and 50-day moving averages, reflecting recent downward momentum.

Investor participation has risen notably, with delivery volumes on 23 January reaching 9.33 lakh shares, a 34.28% increase over the five-day average. Liquidity remains robust, with the stock capable of handling trade sizes up to ₹7.05 crores based on 2% of the five-day average traded value, making it attractive for active traders and institutional players alike.

Mojo Score and Rating Update

MarketsMOJO assigns Asian Paints a Mojo Score of 67.0, reflecting a Hold rating as of 16 January 2026, a downgrade from its previous Buy status. The downgrade signals a more cautious stance amid recent price pressures and sector dynamics. The company retains a Market Cap Grade of 1, confirming its large-cap status with a market capitalisation of ₹2,61,381 crores. This rating adjustment aligns with the increased put option activity, suggesting that market participants are factoring in potential near-term volatility or downside risk.

Expiry Patterns and Strike Price Concentration

The clustering of put option trades around the ₹2,600 and ₹2,500 strike prices for the January and February expiries is particularly telling. The January 27 expiry, with nearly 7,100 contracts at ₹2,600, indicates immediate-term hedging or bearish bets. Meanwhile, the February 24 expiry shows even greater activity, with over 20,800 contracts combined at ₹2,500 and ₹2,600 strikes, suggesting that traders are positioning for a possible correction or increased volatility over the next month.

Open interest figures reinforce this narrative, with the February expiry strikes holding the highest open interest, implying that these positions are not merely speculative but part of a broader hedging or directional strategy. Such patterns often precede periods of heightened price movement or market uncertainty.

Investor Implications and Market Outlook

For investors, the surge in put option activity on Asian Paints is a signal to closely monitor the stock’s price action and sector developments. While the company’s fundamentals remain strong, the recent downgrade and technical indicators suggest caution. The paints sector itself has faced headwinds from raw material cost pressures and fluctuating demand, factors that could weigh on Asian Paints’ near-term earnings growth.

Traders employing options strategies may view the current environment as an opportunity to hedge long positions or speculate on downside moves. The liquidity and active options market for Asian Paints provide ample scope for sophisticated strategies, including protective puts or spreads to manage risk.

Conclusion: Navigating Caution in a Large-Cap Paints Leader

Asian Paints Ltd. remains a cornerstone of the Indian paints sector, but the recent surge in put option volumes and open interest at strikes near the current market price highlights a growing bearish sentiment or strategic hedging among investors. The downgrade to a Hold rating by MarketsMOJO and the stock’s recent price softness reinforce the need for vigilance.

Investors should weigh the company’s solid fundamentals and large-cap status against the technical signals and options market activity that point to potential near-term volatility. Those with exposure to Asian Paints may consider protective strategies or closely monitor sector trends to navigate the evolving landscape effectively.

As the expiry dates approach, the options market will likely continue to provide valuable insights into investor expectations and risk appetite for this key sector player.

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