Rs 190 Puts — 5.8% Above Current Price — Draw 4,368 Contracts on Bandhan Bank Ltd.

Put Options Event and Cash Market Context

On 21 July 2026, Bandhan Bank Ltd. witnessed heavy put option activity ahead of the 28 July expiry. The most active put strikes were Rs 180 and Rs 190, with 8,862 and 4,368 contracts traded respectively. The Rs 180 strike, just above the current underlying price of Rs 179.41, saw the highest turnover of approximately ₹19.49 crores, while the Rs 190 strike accounted for ₹18.41 crores in turnover. Notably, the Rs 185 and Rs 170 strikes also recorded substantial volumes, with 3,903 and 5,576 contracts traded respectively.

The cash market has been under pressure, with the stock falling sharply by nearly 14% today and underperforming its sector by 12.76%. The stock has declined for five consecutive sessions, losing 16.83% over that period. It opened with a gap down of 10% and touched an intraday low near Rs 179.5, close to the weighted average price where most volume traded. This sharp decline sets a critical backdrop for interpreting the put activity — is the put surge a reflection of bearish conviction or protective hedging?

Strike Price Analysis: Moneyness and Distance from Underlying

The Rs 190 strike sits approximately 5.8% above the current price of Rs 179.41, making it an in-the-money (ITM) put option. The Rs 185 strike is also ITM, about 3% above the underlying, while the Rs 180 strike is roughly at-the-money (ATM), just 0.3% above the current price. Conversely, the Rs 170 strike is out-of-the-money (OTM), about 5.3% below the current price.

ITM and ATM put activity often signals directional bearishness or protective hedging, depending on the broader market context. The presence of high volumes at ITM strikes Rs 190 and Rs 185 suggests that some participants may be positioning for further downside or seeking downside protection. Meanwhile, the OTM Rs 170 strike activity could indicate speculative bearish bets or part of spread strategies. The proximity of these strikes to the current price and their relative volumes provide the first clues to the intent behind the put trades — how does this strike distribution shape the overall picture?

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

Put options inherently carry ambiguous signals. The heavy ITM and ATM put volumes on Bandhan Bank Ltd. could be interpreted in three main ways:

• Bearish positioning: Traders may be buying puts anticipating further declines, especially given the stock’s recent sharp fall and negative momentum.
• Protective hedging: Long holders might be purchasing puts to shield against additional downside risk amid volatile market conditions, particularly as the stock trades below several moving averages.
• Put writing (selling puts): Some market participants might be selling puts at these strikes, collecting premium with the expectation that the stock will not fall below these levels by expiry, signalling a cautiously bullish stance.

Given the stock’s steep decline and the concentration of activity at ITM strikes, the dominant interpretation leans towards a combination of bearish bets and protective hedging. The Rs 190 and Rs 185 strikes’ open interest and turnover suggest fresh positioning rather than just rollovers or adjustments. However, the sizeable open interest at Rs 180 and Rs 170 strikes, coupled with relatively lower turnover, hints at some put writing or spread strategies in play.

Open Interest and Contracts Analysis

The Rs 180 put strike holds the highest open interest at 1,646 contracts, with 8,862 contracts traded on the day, indicating significant fresh activity. The Rs 190 strike has 904 open interest contracts against 4,368 traded, while Rs 185 and Rs 170 strikes have 1,141 and 968 open interest respectively. The ratio of contracts traded to open interest varies, with Rs 180 strike showing a ratio of roughly 5.4:1, suggesting a large influx of new positions rather than just rollovers.

This fresh positioning at ITM and ATM strikes supports the view that traders are actively adjusting or initiating bearish or hedging positions. The relatively lower open interest at Rs 190 compared to Rs 180 might indicate that some of the Rs 190 contracts are new directional bets, while Rs 180 could be a mix of hedging and speculative activity. The Rs 170 strike’s open interest and turnover suggest some speculative put buying or spread trades, but less dominant than the strikes closer to the current price.

Cash Market Context: Moving Averages and Delivery Volumes

Bandhan Bank Ltd. currently trades below its 5-day, 20-day, 50-day, and 100-day moving averages but remains above the 200-day moving average. This technical setup indicates short- to medium-term weakness, while the longer-term trend may still hold some support. The Rs 180 and Rs 185 put strikes roughly correspond to support zones near the 200-day moving average, which could explain some of the hedging activity as investors seek protection against a further pullback to these levels.

Interestingly, delivery volumes rose by nearly 49% on 21 July to 59.69 lakh shares, signalling increased investor participation despite the price decline. However, the stock’s weighted average price clustered near the intraday low suggests selling pressure dominated. This combination of rising delivery volume and falling price may have prompted long holders to buy puts for protection — should investors consider this a sign of caution or a temporary correction?

Conclusion: What the Put Activity Signals for Bandhan Bank Ltd.

The heavy put option activity on Bandhan Bank Ltd. ahead of the 28 July expiry reflects a nuanced market stance. The concentration of contracts at ITM and ATM strikes above the current price, combined with the stock’s sharp decline and technical weakness, suggests a blend of bearish positioning and protective hedging. The fresh open interest and turnover ratios reinforce that these are active, new positions rather than mere adjustments.

While some put writing may be present, the dominant narrative is that investors are either bracing for further downside or seeking to shield existing long positions from volatility. The stock’s position relative to moving averages and rising delivery volumes adds complexity to the picture, indicating that the market is cautious but not necessarily capitulating.

For investors weighing their stance on Bandhan Bank Ltd., does this put activity suggest a deeper correction ahead or a tactical pause in a longer-term trend?

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