Surge in Put Option Volumes and Open Interest
On 7 August 2026, Bajaj Finance’s put options dominated the most active contracts list, with three strike prices attracting substantial trading volumes and turnover. The 1100 strike price led activity with 8,240 contracts traded, generating a turnover of ₹1535.11 lakhs and an open interest of 3,671 contracts. Close behind, the 1050 strike saw 3,108 contracts traded with ₹194.17 lakhs turnover and an open interest of 1,929 contracts. The 1090 strike also recorded notable activity with 2,958 contracts traded and ₹449.02 lakhs turnover, though open interest remained relatively modest at 907 contracts.
These figures are particularly significant given the underlying stock price of ₹1,098.5, indicating that traders are positioning for potential downside risks around and below current market levels. The concentration of put option interest near the money suggests a hedging strategy or outright bearish bets as the expiry date approaches.
Price Action Reflects Growing Investor Caution
Bajaj Finance’s stock price has been under pressure, falling 4.04% on the day and underperforming its NBFC sector by 2.74%. The stock has declined for two consecutive sessions, losing 5.23% over this period. It opened sharply lower by 4.09% and touched an intraday low of ₹1,097.8, trading within a narrow range of just ₹0.9. This subdued trading range amid a downtrend points to a cautious market environment with limited upside momentum.
Despite trading above its 20-day, 50-day, 100-day, and 200-day moving averages, the stock remains below its 5-day moving average, signalling short-term weakness. Additionally, delivery volumes have dropped sharply by 60.27% compared to the five-day average, indicating falling investor participation and possibly increased short-term selling pressure.
Fundamental Context and Rating Upgrade
Notwithstanding the recent bearish option activity and price softness, Bajaj Finance retains a strong fundamental profile. The company boasts a large market capitalisation of ₹6,83,983.34 crores and operates within the robust NBFC sector. On 20 July 2026, the stock was upgraded from Hold to Buy with a Mojo Score of 78.0, reflecting improved quality and growth prospects. This upgrade suggests that while short-term volatility and hedging are evident, the medium to long-term outlook remains constructive according to MarketsMOJO’s assessment.
Expiry Patterns and Investor Implications
The expiry date of 25 August 2026 is a focal point for option traders, with the clustering of put option open interest and volumes indicating that market participants are actively managing risk or speculating on downside moves in the near term. The high open interest at the 1100 and 1050 strikes, both close to the current price, implies that these levels may act as key support or resistance zones in the coming weeks.
Investors should note that heavy put option activity can serve dual purposes: hedging existing long positions against potential declines or expressing outright bearish views. Given the stock’s recent price weakness and reduced delivery volumes, the former appears plausible as institutional investors seek protection amid broader market uncertainties.
Comparative Market Performance
In contrast to Bajaj Finance’s 4.04% decline, the NBFC sector fell by 1.30% and the Sensex by a marginal 0.13% on the same day, underscoring the stock’s relative weakness. This divergence may be driving the increased put option interest as traders anticipate further downside or volatility specific to Bajaj Finance.
Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting a trade size of approximately ₹37.24 crores based on 2% of the five-day average. This ensures that option market activity is supported by sufficient underlying liquidity, allowing for efficient execution of hedging or speculative strategies.
Outlook and Strategic Considerations
While the recent surge in put option volumes and open interest signals heightened caution, Bajaj Finance’s fundamental strength and recent rating upgrade suggest that the current bearish sentiment may be tactical rather than structural. Investors should monitor the stock’s price action around the 1050 to 1100 levels closely, as these strikes represent critical junctures for market sentiment.
For those holding long positions, the active put option market offers opportunities to hedge downside risk effectively. Conversely, traders with a bearish outlook may find attractive entry points in the near term, especially if the stock breaches key support levels. The expiry on 25 August 2026 will be a decisive moment, potentially setting the tone for the stock’s trajectory in the subsequent quarter.
