Put Option Activity Highlights
The put options for Bajaj Auto expiring on 28 July 2026 have witnessed a remarkable trading volume of 7,521 contracts, generating a turnover of approximately ₹511.45 lakhs. Open interest stands at 3,154 contracts, signalling sustained interest from market participants in downside protection or speculative bearish bets. The underlying stock price is currently ₹11,291, just 0.67% shy of its 52-week high of ₹11,331, indicating that the strike price of ₹11,200 is positioned slightly below the current market level, making these puts attractive for hedging near-the-money risk.
Market Context and Stock Performance
Bajaj Auto, a large-cap automobile company with a market capitalisation of ₹3,07,578 crores, has demonstrated resilience in a volatile market environment. On 24 July 2026, the stock outperformed its sector by 0.9%, registering a modest gain of 0.32% on the day. This contrasts with the broader Sensex and automobile sector indices, which declined by 0.99% and 1.17% respectively. The stock’s upward trajectory is further supported by its position above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a robust technical setup.
Investor participation has also intensified, with delivery volumes on 23 July reaching 5.48 lakh shares, a 58.67% increase compared to the five-day average. This heightened liquidity, combined with a traded value capacity of ₹18.5 crores based on 2% of the five-day average, ensures that Bajaj Auto remains a liquid and actively traded stock, suitable for both institutional and retail investors.
Interpreting the Put Option Surge
The concentration of put option activity at the ₹11,200 strike price suggests a cautious stance among traders and investors. While the stock is near its yearly peak, the elevated put volumes may reflect hedging strategies to protect gains amid potential short-term volatility or profit booking. Alternatively, some market participants might be positioning for a pullback, anticipating that the stock could test lower support levels in the coming weeks.
Given the expiry date is just four days away, the surge in put contracts could also be attributed to short-term tactical plays, including protective puts for existing long positions or speculative bets on a near-term correction. The open interest figure of 3,154 contracts indicates that these positions are not merely transient but have some degree of persistence, which could influence price dynamics as expiry approaches.
Mojo Score and Analyst Ratings
Bajaj Auto currently holds a Mojo Score of 72.0, categorised as a 'Buy' grade. This represents a slight downgrade from its previous 'Strong Buy' rating assigned on 20 July 2026, reflecting a modest reassessment of the stock’s near-term outlook. The downgrade may be linked to the increased put option activity and the possibility of short-term volatility, despite the company’s solid fundamentals and sector leadership.
Sector and Industry Considerations
Within the automobile sector, Bajaj Auto’s performance stands out positively. The sector has faced headwinds from rising input costs and regulatory challenges, which have pressured margins and investor sentiment. Bajaj Auto’s ability to maintain gains and trade above key moving averages highlights its relative strength. However, the put option interest signals that market participants remain vigilant, possibly anticipating sector-wide corrections or company-specific risks such as supply chain disruptions or demand fluctuations.
Expiry Patterns and Investor Behaviour
Options expiry dates often bring heightened volatility as traders adjust or close positions. The 28 July expiry is no exception, with Bajaj Auto’s put option activity suggesting a defensive posture. Investors holding long positions may be buying puts as insurance, while others might be initiating bearish positions to capitalise on expected price retracements. The strike price of ₹11,200 is a critical level to watch, as a breach below this could trigger further downside momentum, while a hold above it may see the puts expire worthless, benefiting the stock’s bulls.
Outlook and Investor Implications
For investors, the current scenario presents a nuanced picture. Bajaj Auto’s strong technicals and sector outperformance support a positive medium-term outlook. However, the heavy put option activity and slight downgrade in analyst sentiment warrant caution. Investors may consider monitoring the stock’s price action around the ₹11,200 level closely, using option data as a barometer of market sentiment and potential volatility.
Hedging strategies using puts could be prudent for those with significant exposure, while speculative traders might find opportunities in short-term price swings around expiry. Overall, Bajaj Auto remains a key stock to watch in the automobile space, balancing solid fundamentals with evolving market dynamics.
