BSE Ltd Sees Surge in Put Option Activity Amid Bearish Hedging Ahead of February Expiry

Put Option Activity Highlights

On 2 Feb 2026, BSE Ltd emerged as the most active stock in put options, with 2,718 contracts traded at the ₹2,500 strike price for the expiry date of 24 Feb 2026. This activity generated a turnover of approximately ₹1,089.48 lakhs, reflecting substantial investor interest in downside protection or speculative bearish bets. The open interest for these puts stands at 2,107 contracts, indicating sustained positioning rather than transient trades.

The strike price of ₹2,500 is notably below the current underlying value of ₹2,598.20, suggesting that traders are positioning for a potential decline of around 3.6% over the next three weeks. This level is a critical psychological and technical support zone, and the elevated put activity may be interpreted as a hedge against downside risk or outright bearish sentiment.

Stock Performance and Technical Context

BSE Ltd’s stock performance today was positive, with a 0.85% gain, outperforming the sector’s decline of 0.37% and the Sensex’s modest 0.22% rise. However, technical indicators present a mixed picture. The stock is trading above its 100-day and 200-day moving averages, signalling a longer-term uptrend, but remains below its 5-day, 20-day, and 50-day moving averages, indicating short-term weakness or consolidation.

Investor participation has surged dramatically, with delivery volumes reaching 51.32 lakh shares on 1 Feb 2026, a 354.15% increase compared to the five-day average. This spike in delivery volume suggests that investors are taking more definitive positions, possibly in anticipation of volatility or a directional move.

Liquidity remains robust, with the stock’s traded value supporting trade sizes up to ₹34.11 crore based on 2% of the five-day average traded value. This liquidity facilitates active options trading and allows institutional and retail investors to execute sizeable hedging or speculative strategies efficiently.

Mojo Score and Analyst Ratings

BSE Ltd currently holds a Mojo Score of 67.0, categorised as a Hold, reflecting a cautious stance by analysts. This represents a downgrade from a previous Buy rating as of 1 Feb 2026, signalling a reassessment of the stock’s near-term prospects. The market cap grade is 2, indicating a mid-cap classification with moderate liquidity and market presence.

The downgrade aligns with the increased put option activity, suggesting that market participants and analysts alike are factoring in potential headwinds or volatility in the capital markets sector. While the stock’s fundamentals remain intact, the shift in sentiment warrants close monitoring.

Expiry Patterns and Investor Behaviour

The expiry date of 24 Feb 2026 is attracting significant open interest in put options, which often serves as a barometer for investor expectations. The concentration of contracts at the ₹2,500 strike price indicates a consensus level where investors expect either support or a potential breach leading to downside movement.

Such patterns are typical in environments where investors seek to hedge existing long positions or speculate on declines without outright short selling. The elevated open interest and turnover in puts relative to calls suggest a skew towards bearish positioning, possibly driven by macroeconomic concerns or sector-specific developments.

Sector and Market Context

BSE Ltd operates within the capital markets industry, a sector sensitive to economic cycles, regulatory changes, and market volatility. The sector’s 1-day return of -0.37% contrasts with BSE Ltd’s positive 0.85% gain, highlighting the stock’s relative resilience despite bearish option positioning.

Investors should consider the broader market environment, including the Sensex’s modest 0.22% rise, when interpreting option activity. The divergence between spot price performance and options market sentiment may reflect hedging strategies or anticipation of sector-specific risks not yet fully priced into the stock.

Investor Implications and Outlook

The surge in put option activity at a strike price below the current market level signals a cautious or bearish stance among investors. This could be driven by expectations of market corrections, sector-specific challenges, or profit-taking after recent gains. The stock’s mixed technical signals reinforce the need for vigilance.

For investors holding BSE Ltd shares, the elevated put open interest may serve as a warning to consider protective strategies such as stop-loss orders or option hedges. Conversely, traders with a bearish outlook might view the current option premiums as attractive for speculative positions.

Given the stock’s liquidity and active options market, investors have the flexibility to tailor their risk exposure effectively. However, the downgrade in Mojo Grade from Buy to Hold and the prevailing market conditions suggest a prudent approach until clearer directional cues emerge.

Conclusion

BSE Ltd’s recent spike in put option trading highlights a growing bearish sentiment or hedging activity among market participants. While the stock’s fundamentals and longer-term moving averages remain supportive, short-term technical weakness and increased delivery volumes point to a period of consolidation or correction risk.

Investors should closely monitor option expiry dynamics, sector trends, and broader market movements to navigate the evolving landscape. The current Mojo Score and rating downgrade underscore the importance of balanced portfolio management and risk mitigation strategies in the capital markets sector.

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