Rs 850 and Rs 860 Puts Draw Over 4,200 Contracts on Bajaj Finance Ltd as Stock Slips Below Key Moving Averages

Put Options Event and Cash Market Context

On 2 June 2026, the put options at Rs 850 and Rs 860 strikes on Bajaj Finance Ltd saw 2,024 and 2,249 contracts traded respectively, amounting to a combined turnover exceeding ₹733 crores. The underlying stock closed at ₹864.25, down 2.72% on the day and underperforming its sector by 1.84%. The 30 June expiry is less than a month away, adding time sensitivity to these positions. Bajaj Finance Ltd has been on a downward trajectory, losing 7.35% over three days, with the stock now trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages — a technical backdrop that aligns with the put activity but invites deeper analysis on intent. Is this put activity signalling a protective hedge or a directional bearish stance?

Strike Price Analysis: Moneyness and Distance from Underlying

The Rs 850 and Rs 860 put strikes sit approximately 1.6% and 0.5% below the current stock price of ₹864.25, placing them near-the-money (NTM) to slightly out-of-the-money (OTM). This proximity to the underlying price is critical in interpreting the nature of the put activity. Puts close to or slightly below the current price often serve as protection against further downside, especially when the stock is trending lower. The Rs 850 strike, being about 1.6% below, is a common level for hedging against moderate declines, while the Rs 860 strike is almost at-the-money, suggesting more immediate downside protection or speculative bearish positioning.

Interpreting the Put Activity: Hedging, Bearish Positioning, or Put Writing?

Put option activity can reflect multiple strategies. The first possibility is directional bearishness: traders buying puts near the money to profit from further declines. Given the stock's recent fall and breach of key moving averages, this interpretation is plausible. However, the second scenario is hedging: existing long holders purchasing puts to protect gains or limit losses amid a weakening trend. The third scenario, put writing or selling, is less likely here given the high turnover and open interest increase, which typically indicates fresh buying rather than premium collection.

In this case, the combined open interest for the Rs 850 and Rs 860 puts stands at 1,117 and 840 contracts respectively, compared to the number of contracts traded (2,024 and 2,249). The ratio of traded contracts to open interest exceeds 1.8 for both strikes, signalling substantial fresh positioning rather than mere rollovers or adjustments. This fresh buying, coupled with the stock's decline and technical weakness, leans towards a predominantly bearish interpretation, though hedging cannot be ruled out entirely given the proximity of strikes to the current price. Could this mix of fresh put buying and technical weakness indicate a cautious market stance?

Open Interest and Contracts Analysis

The open interest figures of 1,117 for the Rs 850 puts and 840 for the Rs 860 puts, when compared to the traded contracts, indicate a surge in fresh positions. This suggests that traders are actively initiating new put positions rather than merely unwinding or rolling existing ones. The relatively balanced open interest across these two strikes also points to a strategic spread or layered protection approach rather than concentrated speculation at a single strike. The absence of unusually high open interest at strikes significantly below the current price reduces the likelihood of aggressive bearish bets expecting a sharp fall.

Cash Market Context: Technical Momentum and Delivery Volumes

Bajaj Finance Ltd has been under pressure, trading below all major moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day lines. This technical weakness aligns with the put activity, reinforcing the notion of protective or bearish positioning. However, delivery volumes have fallen sharply by 56.62% compared to the 5-day average, with only 41.41 lakh shares delivered on 1 June. This decline in investor participation suggests that the recent sell-off may lack strong conviction, which could explain why put buyers are seeking protection rather than aggressively shorting the stock. Does the thinning delivery volume signal a cautious market awaiting clearer direction?

Delivery Volume and Liquidity Considerations

Despite the recent price decline, the stock remains liquid enough to support sizeable trades, with a 2% threshold of the 5-day average traded value allowing for trade sizes up to ₹28.09 crores. This liquidity facilitates the execution of large option trades such as those seen in the Rs 850 and Rs 860 puts. The falling delivery volume, however, indicates that while the stock is liquid, fewer investors are committing to long-term holdings, which may be prompting existing holders to hedge their positions with puts.

Conclusion: A Blend of Protective Hedging and Bearish Positioning

The put option activity in Bajaj Finance Ltd at the Rs 850 and Rs 860 strikes ahead of the 30 June expiry reflects a market grappling with recent weakness. The near-the-money strikes, combined with fresh open interest and a stock trading below all key moving averages, suggest that the put buying is primarily a mix of protective hedging by existing long holders and some degree of bearish positioning by traders anticipating further downside. The sharp decline in delivery volumes adds nuance, indicating that while the sell-off is significant, it may lack broad conviction, prompting cautious protection rather than aggressive shorting. Should investors interpret this put activity as a warning signal or a prudent hedge amid technical weakness?

Key Data at a Glance

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