Bajaj Auto Sees Heavy Put Option Activity Amid Mixed Market Signals

Put Option Activity Highlights

The most active put option for Bajaj Auto Ltd. is at the ₹9,400 strike price, with 9,349 contracts traded recently. This activity generated a turnover of approximately ₹33.79 crores, reflecting significant investor interest in downside protection or speculative bearish bets. The open interest at this strike stands at 703 contracts, indicating a substantial build-up of positions that could influence price dynamics as expiry approaches.

The underlying stock closed at ₹9,460, just 4.41% shy of its 52-week high of ₹9,888, underscoring its strong recent performance. However, the heavy put option volume at a strike slightly below the current market price suggests that traders are positioning for a potential pullback or increased volatility in the near term.

Price and Technical Context

Bajaj Auto has demonstrated resilience with a two-day consecutive gain, delivering a 3.17% return over this period. It has outperformed the automobile sector by 0.75% and the broader Sensex index, which declined by 0.23% on the same day. The stock is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a robust technical uptrend.

Despite these positive indicators, investor participation appears to be waning. Delivery volume on 22 January 2026 was 80,230 shares, down sharply by 70.86% compared to the five-day average delivery volume. This decline in investor commitment could be a factor behind the increased put option activity, as market participants seek to hedge existing long positions or speculate on a near-term correction.

Fundamental and Market Positioning

Bajaj Auto Ltd. holds a large-cap market capitalisation of ₹2,62,576 crores and operates within the automobile industry, a sector that has shown mixed performance amid evolving consumer demand and supply chain challenges. The company’s Mojo Score stands at 58.0, with a Mojo Grade upgraded from Sell to Hold as of 22 December 2025, reflecting a cautious but improving outlook.

The market cap grade is rated at 1, indicating a very large and liquid stock, which supports active options trading and institutional participation. The stock’s liquidity is sufficient to handle trade sizes up to ₹7.02 crores based on 2% of the five-day average traded value, making it an attractive candidate for both hedging and speculative strategies.

Expiry Patterns and Investor Sentiment

The expiry date of 27 January 2026 is a critical juncture for the stock’s options market. The concentration of put contracts at ₹9,400 suggests that traders are bracing for a possible downside move or increased volatility in the coming week. This strike price is strategically placed just below the current market level, offering a buffer zone for hedgers seeking protection against a moderate decline.

Such heavy put option activity often reflects a dual purpose: institutional investors may be hedging long equity exposures, while speculative traders could be positioning for a short-term correction. The fact that the stock is trading near its yearly highs but with declining delivery volumes supports the notion of cautious optimism mixed with risk management.

Comparative Sector and Market Analysis

Within the automobile sector, Bajaj Auto’s recent outperformance contrasts with broader market hesitancy. The sector’s 1-day return of 0.32% pales in comparison to Bajaj Auto’s 1.15% gain, highlighting the company’s relative strength. However, the Sensex’s negative return on the same day underscores the prevailing market uncertainty that may be driving protective put buying.

Investors should note that while the stock’s technicals remain bullish, the surge in put option interest signals a need for vigilance. The mixed signals from price action, volume, and options market activity suggest that a near-term correction or consolidation phase cannot be ruled out.

Investor Takeaways and Outlook

For investors and traders, the current scenario presents a nuanced picture. Bajaj Auto Ltd.’s strong technical positioning and recent gains are encouraging, but the elevated put option volumes and declining delivery participation warrant caution. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk.

Meanwhile, speculative traders might view the heavy put activity as an opportunity to capitalise on potential volatility around the expiry date. Monitoring open interest changes and price action in the coming days will be crucial to gauge the market’s directional bias.

Overall, Bajaj Auto remains a key stock to watch within the automobile sector, balancing robust fundamentals with tactical risks highlighted by options market behaviour.

Summary of Key Metrics:

• Underlying Price: ₹9,460


• Put Strike Price: ₹9,400


• Put Contracts Traded: 9,349


• Put Turnover: ₹33.79 crores


• Open Interest at Strike: 703 contracts


• 52-Week High: ₹9,888 (4.41% away)


• Market Cap: ₹2,62,576 crores (Large Cap)


• Mojo Score: 58.0 (Hold, upgraded from Sell on 22 Dec 2025)


• Sector 1D Return: 0.32%


• Sensex 1D Return: -0.23%

Investors should continue to monitor both the stock’s price trajectory and options market developments closely as the expiry date approaches, to make informed decisions in a dynamic market environment.

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