Bajaj Auto Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 28 January 2026, Bajaj Auto Ltd. emerged as the most active stock in put options trading, with 4,495 contracts exchanged at the 9,100 strike price expiring on 24 February 2026. The turnover for these contracts reached ₹754.45 lakhs, underscoring substantial investor interest in downside protection or speculative bearish bets. Open interest currently stands at 720 contracts, indicating that a sizeable number of these positions remain open and could influence price action as expiry approaches.

The underlying stock price at the time was ₹9,297, placing the 9,100 strike put options slightly out-of-the-money but within a range that traders consider relevant for hedging or directional plays. This level is particularly noteworthy given the stock’s recent intraday low of ₹9,250, which was a 2.55% decline on the day, signalling a potential support zone near the strike price.

Price and Trend Analysis

Bajaj Auto’s share price underperformed its sector by 1.25% on the day, closing with a 2.01% loss compared to the sector’s 0.91% decline and the Sensex’s modest 0.43% gain. This underperformance follows a three-day rally, marking a trend reversal that may have prompted investors to seek downside protection through put options.

Technically, the stock trades above its 50-day, 100-day, and 200-day moving averages, signalling a longer-term bullish bias. However, it remains below its 5-day and 20-day moving averages, reflecting short-term weakness and potential consolidation. The weighted average price of traded volumes skewed towards the day’s low, suggesting selling pressure intensified as the session progressed.

Investor participation has also waned, with delivery volumes on 27 January falling by 27.88% to 1.33 lakh shares compared to the five-day average. This decline in delivery volume may indicate reduced conviction among buyers, further supporting the increased put option activity as a hedge against possible downside.

Market Capitalisation and Quality Metrics

Bajaj Auto Ltd. is a large-cap stock with a market capitalisation of ₹2,60,492 crores. The company’s Mojo Score currently stands at 58.0, reflecting a Hold rating, an improvement from a previous Sell grade assigned on 22 December 2025. Despite this upgrade, the stock’s market cap grade remains at 1, indicating limited relative strength compared to peers in the automobile sector.

Investor Sentiment and Hedging Implications

The pronounced activity in put options at the 9,100 strike price suggests that investors are positioning for a potential correction or increased volatility in Bajaj Auto’s shares over the next month. Put options serve as a protective hedge for long stock holders or as a speculative instrument for traders anticipating a decline.

Given the stock’s recent price action and technical indicators, the elevated put option volume may reflect a cautious stance amid broader market uncertainties or sector-specific headwinds. The automobile sector has faced challenges related to raw material costs, regulatory changes, and shifting consumer demand patterns, which could be contributing to the hedging behaviour.

Moreover, the open interest of 720 contracts indicates that many traders are maintaining their bearish or protective positions, which could exert downward pressure on the stock if these options are exercised or if market sentiment deteriorates further.

Liquidity and Trading Considerations

Bajaj Auto’s liquidity remains robust, with the stock capable of supporting trade sizes up to ₹5.37 crores based on 2% of its five-day average traded value. This liquidity facilitates active options trading and allows institutional and retail investors to implement hedging or speculative strategies without significant market impact.

However, the recent decline in delivery volumes and the stock’s underperformance relative to its sector highlight the need for investors to monitor evolving market dynamics closely. The interplay between technical support levels, option expiry dates, and broader macroeconomic factors will be critical in shaping the stock’s near-term trajectory.

Outlook and Strategic Takeaways

While Bajaj Auto Ltd. retains a Hold rating with a Mojo Score of 58.0, the surge in put option activity signals that investors are increasingly wary of near-term downside risks. The stock’s technical setup, with short-term moving averages trending lower despite longer-term support, suggests a period of consolidation or correction may be underway.

Investors should weigh the implications of the heavy put option volume alongside fundamental factors such as earnings performance, sector trends, and macroeconomic conditions. The automobile industry’s cyclical nature and sensitivity to input costs warrant a cautious approach, particularly when hedging activity intensifies.

For traders, the 9,100 strike put options expiring on 24 February 2026 represent a key level to watch, as price movements around this strike could influence option premiums and stock volatility. Monitoring open interest changes and volume patterns in the coming weeks will provide further insight into market sentiment and potential price direction.

In summary, Bajaj Auto Ltd.’s recent option market behaviour underscores a nuanced investor outlook balancing between cautious hedging and selective optimism, reflective of broader market complexities in the automobile sector.

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