Put Option Trading Surges Ahead of July Expiry
On 22 Jul 2026, Bajaj Auto Ltd. (NSE: BAJAJ-AUTO) witnessed extraordinary activity in its put options expiring on 28 Jul 2026. The most traded put contracts clustered around strike prices ranging from ₹10,000 to ₹10,800, closely aligned with the underlying stock price of ₹10,795. Notably, the 10,700 strike put option led the pack with 6,397 contracts traded, generating a turnover of ₹465.77 lakhs and an open interest of 1,263 contracts.
Other significant strikes included the 10,000 put with 4,475 contracts traded (turnover ₹24.80 lakhs, open interest 2,399), the 10,300 put with 4,421 contracts (turnover ₹61.94 lakhs, open interest 1,672), and the 10,400 put with 5,121 contracts traded (turnover ₹108.62 lakhs, open interest 1,480). The 10,800 strike also saw 4,188 contracts exchanged, with a substantial turnover of ₹440.34 lakhs and open interest at 928 contracts.
Bearish Positioning or Strategic Hedging?
The heavy put option volumes at strikes slightly below and near the current market price suggest a complex interplay of market sentiment. On one hand, the elevated put buying could indicate increased bearish hedging or speculative bets anticipating a near-term correction. On the other, institutional investors might be employing these puts as protective measures to safeguard long positions amid ongoing volatility.
Given Bajaj Auto’s recent price strength, including a fresh 52-week high of ₹10,838 recorded intraday on 22 Jul 2026, the put activity may reflect prudent risk management rather than outright bearish conviction. The stock outperformed its automobile sector peers by 0.94% on the day, registering a 3.31% gain compared to the sector’s 2.05% rise and the Sensex’s 0.66% decline.
Technical and Fundamental Backdrop
Bajaj Auto’s technical indicators remain firmly bullish. The stock trades above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained upward momentum. Additionally, delivery volumes surged to 4.11 lakh shares on 21 Jul 2026, marking a 33.47% increase over the five-day average, underscoring rising investor participation.
From a fundamental perspective, the company holds a large-cap market capitalisation of ₹2,95,345.42 crores and maintains a favourable Mojo Score of 72.0, with a current Mojo Grade of Buy. This represents a slight moderation from its previous Strong Buy rating as of 20 Jul 2026, reflecting a cautious but positive outlook by analysts.
Expiry Dynamics and Open Interest Insights
The expiry date of 28 Jul 2026 is attracting concentrated option interest, with open interest figures indicating substantial outstanding positions. The highest open interest is seen at the 10,000 strike put with 2,399 contracts, followed by the 10,300 strike at 1,672 contracts. These levels suggest that traders are positioning around these strikes as key support zones, potentially anticipating price reactions in the coming week.
Open interest combined with high turnover at the 10,700 and 10,800 strikes further highlights the importance of these levels as potential hedging or speculative zones. The clustering of put activity near the current price may also imply a market expectation of limited downside or a trading range bounded by these strikes ahead of expiry.
Comparative Sector and Market Context
Within the automobile sector, Bajaj Auto’s outperformance is notable given the broader market’s subdued tone. The Sensex declined by 0.66% on the day, reflecting cautious investor sentiment amid macroeconomic uncertainties. Bajaj Auto’s resilience and active options market suggest that investors are selectively positioning in quality large-cap stocks with strong fundamentals and technical momentum.
Such active put option trading in a fundamentally sound stock often signals a nuanced market view, where participants seek to balance upside potential with downside protection. This dynamic is particularly relevant as the expiry approaches, with traders adjusting positions in response to evolving price action and volatility.
Investor Takeaways
For investors, the current options activity in Bajaj Auto offers valuable insights. The concentration of put contracts near the money indicates heightened caution but not necessarily a bearish outlook. The stock’s strong price action and technical positioning support a constructive medium-term view, while the put options provide a mechanism to hedge against unexpected volatility.
Market participants should monitor open interest changes and price movements closely as expiry nears, as these will reveal whether the put activity translates into actual downside pressure or remains a hedging tool. Given Bajaj Auto’s large-cap status and liquidity, it remains a key stock to watch for directional cues in the automobile sector.
Conclusion
Bajaj Auto Ltd.’s put option market activity ahead of the 28 Jul 2026 expiry underscores a complex blend of bearish positioning and strategic hedging amid a backdrop of strong price momentum. While the stock has recently hit new highs and outperformed its sector, the surge in put volumes near current levels signals prudent risk management by investors. This interplay between bullish fundamentals and cautious option positioning will be critical to watch as the expiry date approaches, offering important clues on market sentiment and potential price trajectories.
