Cholamandalam Investment & Finance Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Trading Overview

Data from the derivatives market reveals that Cholamandalam Investment & Finance Company Ltd (underlying symbol: CHOLAFIN) has recorded substantial put option volumes for the expiry dated 30 December 2025. The most traded put options cluster around strike prices ranging from ₹1,400 to ₹1,640, with the underlying stock price at ₹1,672.8 at the time of analysis.

Among these, the ₹1,640 strike price put options stand out with 7,897 contracts traded, generating a turnover of approximately ₹1183.07 lakhs and an open interest of 3,493 contracts. This level of activity suggests a significant number of market participants are positioning for potential downside or hedging against price declines near the current market price.

Other notable strike prices include ₹1,620 with 4,775 contracts traded and ₹1,500 with 6,339 contracts, both showing robust turnover and open interest figures. The ₹1,580 and ₹1,400 strike prices also feature prominently, with 3,686 and 4,851 contracts traded respectively, indicating a broad range of strike prices attracting put option interest.

Price and Market Context

Cholamandalam Investment & Finance Company’s stock price has demonstrated resilience, touching an intraday high of ₹1,687 on 22 December 2025, representing a 6.44% gain for the day. This performance outpaced the broader Non Banking Financial Company (NBFC) sector, which recorded a 0.38% return, and the Sensex, which declined by 0.19% on the same day.

The stock’s 1-day return stood at 5.83%, reflecting a trend reversal after two consecutive days of decline. Moving averages indicate the stock price is above its 100-day and 200-day averages but remains below the shorter-term 5-day, 20-day, and 50-day averages, suggesting a mixed technical picture.

Investor participation has risen sharply, with delivery volumes reaching 28.78 lakh shares on 22 December, a 266.74% increase compared to the five-day average. Liquidity metrics confirm the stock is sufficiently liquid to support trade sizes of approximately ₹7.18 crore, facilitating active trading and option market activity.

Interpreting the Put Option Activity

The concentration of put option contracts at strike prices close to and below the current market price suggests a cautious stance among investors. The highest open interest at the ₹1,640 strike price, just 32 points below the underlying value, indicates hedging strategies or speculative bets on a near-term price correction.

Put options at ₹1,500 and ₹1,580 also show elevated open interest, which may reflect layered protection or anticipation of volatility. The presence of significant contracts at the ₹1,400 strike price, considerably below the current price, could imply longer-term hedging or a view that downside risk extends further.

Such activity is typical ahead of expiry dates, as traders adjust positions to manage risk or capitalise on expected price movements. The expiry on 30 December 2025 is a focal point for these strategies, with volumes and turnover underscoring the importance of this date in market participants’ planning.

Sector and Market Capitalisation Context

Cholamandalam Investment & Finance Company operates within the NBFC sector, a segment that has experienced varied investor sentiment due to regulatory changes and macroeconomic factors. With a market capitalisation of approximately ₹1,33,907 crore, the company is classified as a large-cap entity, attracting institutional and retail investor attention alike.

The stock’s recent outperformance relative to its sector and the broader market may be influencing option market behaviour, as participants seek to balance optimism with prudent risk management through put options.

Implications for Investors and Traders

The pronounced put option activity in Cholamandalam Investment & Finance Company suggests that market participants are actively managing exposure to potential downside risks. This could be driven by expectations of near-term volatility or sector-specific developments impacting NBFCs.

For investors, the data highlights the importance of monitoring option market signals as part of a comprehensive investment approach. The elevated open interest and turnover in put options at multiple strike prices provide insights into market sentiment that may not be immediately apparent from stock price movements alone.

Traders may view the current option landscape as an opportunity to capitalise on price swings or to implement hedging strategies that protect portfolios against adverse movements. The liquidity and delivery volumes support active participation, making Cholamandalam Investment & Finance Company a focal point for derivatives market activity in the NBFC sector.

Looking Ahead

As the 30 December 2025 expiry date approaches, attention will remain on how the stock price interacts with key strike prices where put option interest is concentrated. Market developments, sector news, and broader economic indicators will influence whether these put options are exercised, rolled over, or closed out.

Investors and traders should continue to analyse both the underlying stock’s price action and the evolving option market data to gauge shifts in sentiment and risk appetite. The interplay between spot market performance and derivatives activity will be crucial in shaping near-term trends for Cholamandalam Investment & Finance Company.

Summary

Cholamandalam Investment & Finance Company Ltd has attracted significant put option interest ahead of the December expiry, with strike prices from ₹1,400 to ₹1,640 seeing heavy trading volumes and open interest. This activity reflects a nuanced market stance combining hedging and bearish positioning amid a backdrop of recent price gains and sector dynamics. Investors and traders are advised to monitor these developments closely as expiry approaches, considering the implications for risk management and potential price movements.

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