Rs 3,600 Puts — 1.7% Below Current Price — Draw 3,657 Contracts on Avenue Supermarts Ltd

Put Options Event and Cash Market Context

On 5 Oct 2026, Avenue Supermarts Ltd saw 3,657 put contracts traded at the Rs 3,600 strike and 4,337 contracts at Rs 3,700, both expiring on 27 Oct 2026. The turnover for these strikes was substantial, with Rs 4.94 crores and Rs 8.54 crores respectively. The underlying stock closed at Rs 3,661.20, down 2.86% on the day, having opened with a gap down of 4.32% and touched an intraday low of Rs 3,645.80. This price action places the Rs 3,600 puts approximately 1.7% out-of-the-money (OTM) and the Rs 3,700 puts about 1.1% in-the-money (ITM).

The stock’s recent trend shows a reversal after two consecutive days of gains, trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical backdrop. The retail sector, in which Avenue Supermarts Ltd operates, also declined by 3.53% on the day, adding to the pressure.

With puts active and calls active on the same stock, buy, sell, or hold Avenue Supermarts Ltd? The full analysis cuts through the options noise.

Strike Price Analysis: Moneyness and Intent

The Rs 3,600 strike sits just 1.7% below the current price, while the Rs 3,700 strike is slightly ITM by 1.1%. This proximity to the underlying price suggests that the put activity is not deeply speculative but rather focused on near-term protection or tactical positioning. The Rs 3,600 puts being OTM but close to the money could indicate hedging against a modest pullback, especially given the stock’s recent weakness and technical positioning below key moving averages.

Conversely, the Rs 3,700 ITM puts may reflect more directional bearish bets or protective puts for existing long positions. The presence of significant contracts at both strikes suggests a mixed strategy among market participants, balancing protection with potential downside conviction.

OTM puts at Rs 3,600 while the stock trades near Rs 3,661 — is this hedging, a bearish bet, or put writing? The complete analysis of Avenue Supermarts Ltd reveals what the full data set points to.

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

Put options inherently carry ambiguous signals. The Rs 3,600 strike’s slight OTM status combined with the stock’s recent decline suggests a protective hedge against further downside rather than outright bearish speculation. Investors holding long positions may be buying these puts to limit losses amid the stock’s fall below multiple moving averages.

However, the sizeable volume at the Rs 3,700 ITM strike, with 4,337 contracts traded, points to some degree of bearish positioning. Buyers at this strike would profit from a more pronounced decline, indicating that some participants expect further weakness. Yet, the open interest at Rs 3,700 is 1,468 contracts, lower than the day’s traded volume, implying fresh positioning rather than unwinding.

Put writing, or selling puts to collect premium, is less evident here. The turnover and open interest ratios do not suggest aggressive premium collection at these strikes. The Rs 3,600 puts have an open interest of 1,842 contracts against 3,657 traded, indicating a significant influx of new positions rather than established sellers. This reduces the likelihood of put writing as the dominant strategy.

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest is roughly 2:1 for the Rs 3,600 puts and nearly 3:1 for the Rs 3,700 puts, signalling substantial fresh activity. This suggests that the put buying is not merely position adjustment but new hedging or directional bets. The open interest levels remain moderate relative to the turnover, reinforcing the idea of active repositioning ahead of the 27 Oct expiry.

Such fresh positioning at strikes close to the current price often reflects tactical responses to recent price action rather than speculative long-term bets. The expiry proximity further supports this, as traders seek to manage risk or capitalise on near-term volatility.

Cash Market Context: Technicals and Delivery Volumes

Avenue Supermarts Ltd is trading below all major moving averages, a bearish technical signal that aligns with the put activity at near-the-money strikes. The stock’s recent reversal after two days of gains and the sector’s underperformance by 3.53% reinforce the cautious mood.

Delivery volumes rose by 12.03% on 1 Oct to 3.38 lakh shares, indicating increased investor participation, yet the stock’s weighted average price was closer to the day’s low, suggesting selling pressure. This thinning conviction in the rally may explain why investors are seeking downside protection through puts rather than aggressively buying calls.

Heavy put activity on a falling stock — should you be hedging your position in Avenue Supermarts Ltd too, or does the data suggest the decline has more room?

Conclusion: Protective Hedging with a Bearish Underpinning

The put option activity in Avenue Supermarts Ltd reflects a nuanced picture. The Rs 3,600 OTM puts likely represent protective hedging by longs wary of further downside, while the Rs 3,700 ITM puts suggest some directional bearish bets. The fresh positioning indicated by the high traded volume relative to open interest supports this dual interpretation.

Put writing appears minimal, reducing the likelihood that the activity is a bullish premium collection strategy. The stock’s technical weakness and sector underperformance align with the put buying as a risk management tool rather than outright pessimism.

Given the mixed signals from the options and cash markets, what is the most prudent stance on Avenue Supermarts Ltd at this juncture?

Key Data at a Glance

Disclaimer: Options trading involves risk and is not suitable for all investors. The data presented is for informational purposes and does not constitute investment advice.

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