Bajaj Finance Sees Heavy Put Option Activity Amid Mixed Market Signals

Put Option Activity Highlights

The most active put options for Bajaj Finance Ltd have centred on the ₹900 strike price, with 4,529 contracts traded, generating a turnover of approximately ₹348.85 lakhs. Open interest stands at 2,985 contracts, signalling sustained interest in downside protection or speculative bearish bets. This activity is particularly significant given the underlying stock price of ₹955.75, indicating that investors are hedging against a potential decline below the ₹900 level before the February expiry.

Stock Performance and Market Context

On 3 February 2026, Bajaj Finance Ltd outperformed its sector by 1.97%, closing with a robust 5.52% gain on the day. The stock has been on a positive trajectory for two consecutive sessions, delivering a cumulative return of 5.59%. It opened with a gap up of 6.23% and touched an intraday high of ₹972.80, marking a 7.65% rise from the previous close. Despite this strong short-term momentum, the weighted average price suggests that most volume traded near the day’s low, hinting at some selling pressure within the session.

Technical indicators present a mixed picture. The stock price currently trades above its 5-day and 20-day moving averages but remains below the longer-term 50-day, 100-day, and 200-day averages. This positioning suggests that while short-term sentiment is bullish, the medium to long-term trend has yet to confirm a sustained uptrend. The broader Finance/NBFC sector gained 3.43% on the same day, with Bajaj Finance outperforming the sector and the Sensex, which rose 2.83%.

Investor Participation and Liquidity

Investor interest in Bajaj Finance Ltd has intensified, with delivery volumes reaching 80.49 lakh shares on 2 February, a 39.63% increase compared to the five-day average. This heightened participation underscores the stock’s liquidity and attractiveness for both institutional and retail investors. The stock’s liquidity supports trade sizes up to ₹14.64 crore based on 2% of the five-day average traded value, making it a viable option for sizeable portfolio adjustments.

Mojo Score and Rating Revision

Bajaj Finance Ltd currently holds a Mojo Score of 61.0, reflecting a moderate outlook with a Hold grade. This marks a downgrade from a previous Buy rating assigned on 1 February 2026. The downgrade signals a cautious stance by analysts, likely influenced by the mixed technical signals and the increased put option activity. The company’s market capitalisation stands at a substantial ₹5,89,549 crore, categorising it firmly as a large-cap stock with significant institutional interest.

Interpreting the Put Option Surge

The heavy put option volume at the ₹900 strike price, which is roughly 6% below the current market price, suggests that investors are either hedging existing long positions or speculating on a near-term correction. The open interest of 2,985 contracts indicates that this is not merely a one-off spike but a sustained positioning ahead of the February expiry. Such activity often precedes periods of increased volatility, as market participants seek protection against downside risks or position for a potential pullback.

Given the stock’s recent gains and the broader sector’s positive momentum, this bearish options interest may also reflect profit-booking or risk management strategies rather than outright negative sentiment. The fact that the stock remains above short-term moving averages supports the view that the underlying fundamentals remain intact, but investors are mindful of potential headwinds.

Sector and Market Implications

The NBFC sector has shown resilience, with a 3.43% gain on the day, supported by improving credit demand and stable asset quality trends. Bajaj Finance Ltd’s outperformance relative to its peers and the Sensex highlights its leadership position. However, the cautious tone in options markets suggests that investors are bracing for possible sector rotation or macroeconomic uncertainties that could impact credit growth or funding costs.

Market participants should monitor the evolution of open interest and volume in both put and call options to gauge shifts in sentiment. A sustained increase in put buying coupled with declining call interest could signal a more pronounced bearish outlook, whereas balanced activity might indicate hedging rather than directional bets.

Investor Takeaways and Outlook

For investors, the current scenario presents a nuanced picture. While Bajaj Finance Ltd’s recent price action and sector leadership remain positive, the surge in put option activity advises caution. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might find the ₹900 strike puts attractive for speculative plays, given the elevated open interest and liquidity.

Long-term investors should weigh the company’s fundamentals, including asset quality, loan growth, and regulatory environment, against the technical signals and market sentiment. The downgrade to a Hold rating by MarketsMOJO analysts underscores the need for a balanced approach, avoiding overexposure while remaining alert to opportunities arising from market volatility.

Expiry Patterns and Future Monitoring

The 24 February 2026 expiry will be a critical juncture for Bajaj Finance Ltd’s options market. Monitoring changes in open interest and volume in the days leading up to expiry can provide valuable insights into investor expectations. A shift in strike price concentration or a sudden increase in call option activity could signal a change in sentiment or a potential breakout.

Given the stock’s current trading range and technical setup, the ₹900 strike price serves as a key support level to watch. Breach of this level could trigger further downside, while holding above it may reinforce confidence among bulls.

In summary, Bajaj Finance Ltd’s active put option market reflects a cautious investor stance amid a backdrop of recent gains and sector strength. This dynamic warrants close attention from market participants seeking to navigate the evolving risk-reward landscape in the NBFC space.

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