Put Option Surge Highlights Bearish Sentiment
On 2 January 2026, Bajaj Auto Ltd. (NSE: BAJAJ-AUTO) recorded substantial trading volumes in put options, particularly at strike prices of ₹9,300 and ₹9,400, both expiring on 27 January 2026. The 9,400 strike saw the highest number of contracts traded at 2,531, generating a turnover of ₹30.89 crores, while the 9,300 strike followed with 1,762 contracts and a turnover of ₹16.46 crores. Open interest at these strikes remains robust, with 1,074 contracts at ₹9,400 and 914 contracts at ₹9,300, indicating sustained investor interest in downside protection or speculative bearish bets.
The underlying stock closed at ₹9,483, just 0.76% shy of its 52-week high of ₹9,585, yet it underperformed its sector by 0.88% and the broader Sensex by 0.32% on the day. This divergence between the stock’s price performance and option market activity suggests that traders are positioning for potential volatility or a correction in the near term.
Price and Volume Dynamics
Bajaj Auto’s price action on 1 January 2026 showed a notable intraday low of ₹9,310.5, down 2.59% from recent levels, marking a reversal after four consecutive days of gains. Despite this, the stock remains above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, reflecting an overall bullish trend in the medium to long term.
Investor participation has been on the rise, with delivery volumes reaching 1.45 lakh shares on 1 January, a 2.7% increase over the five-day average. Liquidity remains healthy, with the stock’s traded value supporting sizeable transactions up to ₹5.65 crores without significant market impact.
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Mojo Score Upgrade Reflects Mixed Outlook
Bajaj Auto currently holds a Mojo Score of 58.0, categorised as a 'Hold' rating, upgraded from a previous 'Sell' grade on 22 December 2025. This upgrade reflects some improvement in the company’s fundamentals and market positioning, though caution remains warranted given the recent option market signals. The company’s market capitalisation stands at a substantial ₹2,67,217 crores, affirming its status as a large-cap stock within the automobile sector.
Interpreting the Put Option Activity
The concentration of put option trades at ₹9,300 and ₹9,400 strikes, both below the current market price, suggests that investors are either hedging existing long positions or speculating on a near-term price decline. The open interest figures reinforce this view, as they indicate that these positions are not merely intraday trades but part of a broader strategic stance.
Put options serve as insurance against downside risk or as a vehicle for bearish bets. The elevated turnover of over ₹47 crores combined across these strikes is significant for a stock of Bajaj Auto’s size and liquidity, signalling heightened market nervousness or anticipation of volatility ahead of the January expiry.
Sector and Market Context
Within the automobile sector, Bajaj Auto’s 1-day return of -0.86% contrasts with the sector’s positive 0.55% gain and the Sensex’s 0.32% rise, underscoring relative weakness. This underperformance, coupled with the put option surge, may reflect concerns over near-term demand, input cost pressures, or broader macroeconomic uncertainties impacting the two-wheeler and three-wheeler segments where Bajaj Auto operates.
Technical and Fundamental Considerations
Technically, the stock’s position above all major moving averages suggests underlying strength, but the recent price dip and put option interest highlight a potential short-term correction or consolidation phase. Investors should monitor key support levels around ₹9,300 and resistance near the 52-week high of ₹9,585 for directional cues.
Fundamentally, Bajaj Auto’s large-cap status and improved Mojo Grade indicate resilience, but the Hold rating advises prudence. Market participants may be balancing optimism about long-term growth with caution over cyclical headwinds.
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Investor Takeaway
For investors and traders, the current put option activity in Bajaj Auto signals a cautious stance. While the stock’s fundamentals and medium-term technicals remain supportive, the surge in bearish options interest ahead of the January expiry suggests that market participants are preparing for possible volatility or a price correction.
Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels. Conversely, speculative traders might view the elevated put volumes as an opportunity to capitalise on short-term downside moves, especially if broader market or sector conditions deteriorate.
Monitoring open interest changes and price action in the coming days will be crucial to gauge whether this bearish positioning intensifies or unwinds.
Conclusion
Bajaj Auto Ltd.’s recent option market activity highlights a nuanced market outlook. Despite trading near its yearly highs and showing technical strength, the heavy put option volumes at strikes below the current price reflect investor hedging and bearish sentiment. This duality underscores the importance of a balanced approach, combining fundamental analysis with vigilant risk management in navigating the stock’s near-term trajectory.
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