5,701 Put Contracts at Rs 9,500 Strike Signal Protective Hedging in Bajaj Auto Ltd.

Put Options Event and Cash Market Context

On 24 Jun 2026, Bajaj Auto Ltd. saw significant put option activity concentrated at the Rs 9,500 strike for the 30 June expiry. A total of 5,701 contracts changed hands, generating a turnover of approximately ₹174.6 lakhs. The open interest at this strike stands at 1,393 contracts, indicating a moderate build-up of positions relative to the day's volume.

The stock itself has been under pressure recently, falling 1.83% on the day and down 3.48% over the past two sessions. Intraday lows touched Rs 9,758, about 0.8% below the current market price, while the stock remains above its 100-day and 200-day moving averages but below the 5-day, 20-day, and 50-day averages. This mixed technical picture adds nuance to the interpretation of the put activity — is the put buying a sign of defensive positioning or a bearish conviction?

Strike Price Analysis: Moneyness and Intent

The Rs 9,500 strike sits roughly 3.4% below the underlying price of Rs 9,841, placing these puts out-of-the-money (OTM). OTM puts are often purchased as insurance against a moderate decline rather than as outright directional bets. The proximity of the strike to the current price suggests that buyers may be seeking protection against a near-term pullback rather than anticipating a sharp fall.

In contrast, the Rs 9,700 puts, which are closer to at-the-money (ATM), saw 5,518 contracts traded but with a lower open interest of 1,268. The similar volume at two nearby strikes indicates a spread of hedging activity across a range of downside levels. The Rs 9,700 strike is about 1.4% below the current price, which could imply a more immediate protective stance.

Interpreting the Put Activity: Hedging, Bearishness, or Put Writing?

Put option activity can signal several strategies. First, outright put buying at OTM strikes on a stock that has recently declined but remains above major long-term moving averages often reflects hedging by existing long holders. This is consistent with the stock’s recent pullback and the technical support zone near the 100-day MA.

Second, if the puts were ATM or in-the-money (ITM) and the stock was falling sharply, the activity might indicate bearish positioning. However, the stock’s modest decline and the OTM nature of the bulk of put volume make this less likely.

Third, put writing (selling puts) is a bullish strategy where traders collect premium expecting the stock to stay above the strike. The open interest at these strikes is moderate but not excessively high relative to traded volume, suggesting fresh buying rather than significant put writing.

Open Interest and Contracts: Fresh Positioning or Adjustments?

The ratio of contracts traded to open interest at the Rs 9,500 strike is approximately 4.1:1, indicating a significant amount of fresh activity relative to existing positions. This suggests that the put buying is not merely rollovers or adjustments but new hedging or speculative positions being established.

Similarly, the Rs 9,700 strike shows a ratio of about 4.3:1, reinforcing the view of fresh demand for downside protection. The open interest levels are not excessively high, which reduces the likelihood of large-scale put writing dominating the activity.

Cash Market Context: Technicals and Delivery Volumes

Bajaj Auto Ltd. has been trending below its short-term moving averages (5-day, 20-day, 50-day) but remains comfortably above the 100-day and 200-day averages. This positioning often signals a short-term correction within a longer-term uptrend, which aligns with the idea of hedging rather than bearish conviction.

Delivery volumes on 23 Jun rose by 32.64% to 3.88 lakh shares, indicating increased investor participation despite the recent price weakness. However, the stock’s underperformance relative to its sector (-0.64% today) and the Sensex’s positive return (+0.51%) suggest some caution among traders — does this imply a cautious stance or a temporary pause in momentum?

Delivery Volume and Liquidity Considerations

The stock’s liquidity remains robust, with a traded value sufficient to support sizeable trades of around ₹11.19 crores. The rising delivery volumes alongside falling prices may be a sign of profit booking or cautious repositioning by investors, which often prompts protective put buying to guard against further downside.

Conclusion: Protective Hedging Dominates Put Activity

The concentration of put contracts at strikes 3-4% below the current price, combined with the stock’s recent modest decline and technical positioning above long-term moving averages, strongly suggests that the put activity in Bajaj Auto Ltd. is primarily protective hedging by existing long holders rather than outright bearish bets.

Open interest and turnover ratios indicate fresh buying of puts rather than significant put writing, and the rising delivery volumes alongside the price dip reinforce the notion of cautious risk management. While a bearish interpretation cannot be entirely ruled out, the data favours a defensive stance amid a short-term correction within a longer-term uptrend — should investors consider similar protective measures or view this as a buying opportunity?

Options Risk Warning: Trading in options involves significant risk and is not suitable for all investors. Please ensure you understand the risks involved before engaging in options trading.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year Start at 33% Off →