Put Option Activity Highlights
Data from the derivatives market reveals that Bharti Airtel's put options expiring on 30 December 2025 have recorded a total of 3,535 contracts traded, with a turnover of approximately ₹335.99 lakhs. The open interest stands at 2,373 contracts, indicating sustained interest in downside protection or speculative bearish bets at this strike level. The underlying stock price at the time of this activity was ₹2,097.20, placing the ₹2,100 strike price just slightly out of the money.
This concentration of put option activity near the current market price suggests that investors are positioning for potential volatility or downside risk in the near term. The expiry date being just over ten days away adds urgency to these trades, as market participants seek to hedge or capitalise on expected price movements before the year-end.
Price and Market Context
Bharti Airtel's stock price is currently trading within 3.79% of its 52-week high of ₹2,174.50, indicating a relatively strong performance over the past year. On the day of analysis, the stock's return was 0.19%, which was slightly below the sector return of 0.36% and the Sensex gain of 0.57%. This relative underperformance may be contributing to the increased put option interest as investors weigh the stock's near-term prospects.
Technical indicators show the stock price positioned above its 5-day, 50-day, 100-day, and 200-day moving averages, but below the 20-day moving average. This mixed technical picture could be prompting traders to adopt a cautious approach, reflected in the put option volumes.
Investor participation has shown signs of moderation, with delivery volumes on 18 December recorded at 25.4 lakh shares, representing an 8.61% decline compared to the five-day average delivery volume. Despite this, liquidity remains adequate, with the stock supporting trade sizes of up to ₹19.05 crore based on 2% of the five-day average traded value.
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Implications of Put Option Interest
Heavy put option activity often signals a degree of bearish sentiment or hedging against potential downside risk. In Bharti Airtel's case, the concentration of trades at the ₹2,100 strike price, close to the current market level, suggests that investors are either protecting existing long positions or speculating on a price correction.
Given the stock's proximity to its 52-week high and the mixed technical signals, market participants may be anticipating a period of consolidation or volatility. The telecom sector's performance, which has been relatively stable, also factors into this positioning, as investors balance sector trends with company-specific developments.
Expiry Patterns and Market Sentiment
The December expiry is a critical period for options traders, often accompanied by increased volumes and open interest as positions are squared off or rolled forward. The significant open interest in Bharti Airtel's put options indicates that many traders are maintaining bearish or protective stances through this expiry cycle.
Such activity can lead to heightened price sensitivity around the strike price, with potential for increased volatility as expiry approaches. Investors and traders should monitor price movements closely, especially given the stock's large market capitalisation of approximately ₹11,92,909 crore, which underscores its importance within the telecom services sector.
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Sector and Market Comparison
Bharti Airtel operates within the Telecom - Services industry, a sector that has shown steady performance but faces challenges from regulatory changes and competitive pressures. The stock's one-day return of 0.19% on the day analysed was below the sector average of 0.36% and the broader Sensex gain of 0.57%, indicating a relatively cautious market stance towards the company.
Despite this, the stock remains liquid and well-traded, supporting sizeable trade volumes and enabling investors to execute large orders without significant price impact. This liquidity is a key factor for options traders who require efficient entry and exit points for their positions.
Investor Takeaways
Investors should consider the implications of the concentrated put option activity as a signal of market caution or hedging. While Bharti Airtel's fundamentals and market position remain robust, the options market suggests that some participants are preparing for potential near-term price adjustments.
Monitoring the stock’s price action relative to the ₹2,100 strike price and the upcoming expiry date will be crucial for assessing whether bearish sentiment materialises or if the stock maintains its current trajectory. Additionally, keeping an eye on sector trends and broader market movements will provide further context for decision-making.
Overall, the interplay between the stock’s technical indicators, option market positioning, and sector dynamics paints a nuanced picture that investors should analyse carefully.
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