Robust Price Performance and Market Position
BSE Ltd (stock code 1002707) has been on a strong upward trajectory, hitting a new 52-week high of ₹3,175 on 10 February 2026. The stock outperformed its sector by 5.8% and the Sensex by 5.77% on the same day, delivering a robust 6.09% gain compared to the sector’s decline of 0.25% and the Sensex’s modest 0.32% rise. This outperformance is underpinned by the stock trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bullish momentum.
Investor participation has also intensified, with delivery volumes reaching 19.95 lakh shares on 9 February, a 39.33% increase over the five-day average. The stock’s liquidity remains healthy, supporting trade sizes up to ₹28.21 crore based on 2% of the five-day average traded value. With a market capitalisation of ₹1,28,983.47 crore, BSE Ltd is classified as a mid-cap stock within the capital markets industry.
Heavy Put Option Activity: Strike Prices and Expiry Patterns
Despite the bullish price action, the options market reveals a surge in put option contracts, particularly for the 24 February 2026 expiry. The most active put options for BSE Ltd are concentrated at strike prices ranging from ₹2,800 to ₹3,200, with notable volumes and open interest figures:
- Strike ₹3,200: 1,893 contracts traded, turnover of ₹969.12 lakh, open interest at 653 contracts
- Strike ₹3,150: 2,489 contracts traded, turnover of ₹1,022.89 lakh, open interest at 653 contracts
- Strike ₹3,100: 4,868 contracts traded, turnover of ₹1,619.77 lakh, open interest at 1,501 contracts
- Strike ₹2,850: 2,004 contracts traded, turnover of ₹157.29 lakh, open interest at 1,027 contracts
- Strike ₹2,800: 3,861 contracts traded, turnover of ₹223.26 lakh, open interest at 2,442 contracts
The underlying value of BSE Ltd at the time of these trades was ₹3,165, placing the majority of put activity slightly out-of-the-money or near-the-money. The concentration of open interest at the ₹2,800 and ₹3,100 strikes suggests that investors are positioning for potential downside protection or hedging against volatility in the near term.
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Bearish Positioning and Hedging Strategies
The surge in put option volumes, particularly at strikes below the current market price, indicates a growing interest in downside protection. This activity can be interpreted as a hedging mechanism by institutional investors or traders seeking to safeguard gains amid the stock’s recent rally. The open interest of 2,442 contracts at the ₹2,800 strike is especially telling, as it represents a significant buffer zone approximately 11% below the current price level.
Moreover, the high turnover at the ₹3,100 strike, with 4,868 contracts traded and ₹1,619.77 lakh in turnover, suggests active speculative or protective positioning close to the money. This may reflect market participants’ anticipation of short-term volatility or a potential pullback after the recent highs.
Mojo Score and Analyst Ratings
BSE Ltd’s strong fundamentals are reflected in its MarketsMOJO score of 90.0, categorised as a ‘Strong Buy’. This represents an upgrade from a previous ‘Buy’ rating on 6 February 2026, signalling improved confidence in the stock’s prospects. Despite the bearish undertones in the options market, the fundamental outlook remains robust, supported by solid earnings growth, market leadership, and favourable sector dynamics.
Sector and Market Context
The capital markets sector has experienced mixed performance recently, with BSE Ltd standing out as a top performer. The stock’s ability to outperform both its sector and the Sensex amid broader market uncertainties highlights its resilience. However, the elevated put option activity underscores a cautious stance among sophisticated investors, who may be preparing for near-term corrections or increased volatility.
Implications for Investors
For investors, the current scenario presents a dual narrative. On one hand, the strong price momentum and upgraded analyst ratings favour a bullish outlook. On the other, the heavy put option volumes and open interest at lower strikes suggest prudent risk management and hedging by market participants. This combination implies that while confidence in BSE Ltd’s medium to long-term prospects remains high, short-term volatility cannot be ruled out.
Investors should monitor the evolving options open interest and price action closely, particularly as the 24 February expiry approaches. The interplay between bullish momentum and bearish hedging may create trading opportunities for those adept at navigating volatility.
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Conclusion: Balancing Momentum with Caution
BSE Ltd’s recent price surge and strong fundamental ratings position it favourably within the capital markets sector. However, the pronounced put option activity ahead of the February expiry reveals a layer of caution among investors, reflecting concerns about potential near-term corrections or volatility. This dynamic highlights the importance of a balanced investment approach, combining confidence in the stock’s growth trajectory with prudent risk management strategies.
As the expiry date nears, market participants will be closely watching the evolution of option open interest and price movements to gauge the prevailing sentiment and adjust their positions accordingly. For investors seeking exposure to BSE Ltd, understanding these nuances will be critical to navigating the stock’s complex risk-reward profile in the weeks ahead.
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