Colgate-Palmolive (India) Ltd Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Intense Put Option Trading Highlights Bearish Positioning

On 30 January 2026, Colgate-Palmolive (India) Ltd (COLPAL) recorded a remarkable 2,691 put option contracts traded at the ₹2,100 strike price, generating a turnover of approximately ₹38.33 crores (383.27 lakhs). This level of activity is significant given the stock’s underlying value of ₹2,100.4, indicating that investors are positioning for potential downside or seeking protection against further declines. Open interest at this strike stands at 1,000 contracts, suggesting sustained interest in bearish bets or hedging strategies ahead of the February expiry.

Price Action Reflects Growing Investor Caution

Colgate-Palmolive’s share price has been under pressure, hitting a new 52-week low of ₹2,029.4 on the same day, marking a 3.94% intraday decline. The stock has underperformed its FMCG sector peers by 1.75% and has recorded a consecutive two-day fall, losing 2.71% over this period. This downtrend is further underscored by the stock trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a weak technical setup and bearish momentum.

Investor participation has notably increased, with delivery volumes rising 19.2% to 2.88 lakh shares on 29 January compared to the five-day average. This heightened activity suggests that market participants are actively adjusting their positions amid growing uncertainty. Liquidity remains adequate, with the stock supporting trade sizes of up to ₹1.94 crore based on 2% of the five-day average traded value, facilitating smooth execution of large option trades.

Fundamental and Market Context

Colgate-Palmolive (India) Ltd operates in the FMCG sector, a traditionally defensive space, but its current Mojo Score of 28.0 and a Mojo Grade of Strong Sell (upgraded from Sell on 24 October 2025) reflect deteriorating fundamentals and negative market sentiment. The company’s market capitalisation stands at ₹57,439 crore, categorising it as a mid-cap stock. Despite the sector’s overall resilience, Colgate’s recent underperformance relative to the Sensex (which declined 0.48% on the day) and the FMCG sector’s positive 1.09% return highlights company-specific challenges.

Expiry Patterns and Strike Price Significance

The put options expiring on 24 February 2026 at the ₹2,100 strike price have attracted the highest volume, indicating that traders are focusing on this level as a critical support or potential downside target. The strike price closely aligns with the current market price, suggesting that investors are either hedging existing long positions or speculating on a near-term decline. The open interest of 1,000 contracts at this strike further confirms that this level is a focal point for market participants.

Such concentrated put activity often precedes increased volatility, as traders adjust their positions in anticipation of earnings announcements, macroeconomic developments, or sector-specific news. Given the stock’s recent technical weakness and fundamental downgrades, the elevated put option interest may also reflect growing scepticism about the company’s ability to sustain growth or margin expansion in a competitive FMCG environment.

Bearish Positioning and Hedging Strategies

The surge in put option volumes is a classic indicator of bearish positioning or risk mitigation. Institutional investors and traders may be using these options to hedge against further downside risk in Colgate-Palmolive shares, especially given the stock’s recent underperformance and negative technical signals. The strong sell Mojo Grade reinforces this cautious stance, signalling that the company’s fundamentals and market outlook have deteriorated since the previous Sell rating.

For retail investors, the rising put activity serves as a warning sign to reassess exposure to COLPAL, particularly if the stock fails to find support near current levels. Conversely, option sellers might be capitalising on elevated premiums, but they face the risk of sharp price moves if bearish momentum accelerates.

Implications for Investors and Market Outlook

Investors should closely monitor Colgate-Palmolive’s price action and option market dynamics in the coming weeks. The heavy put option activity at the ₹2,100 strike price and the stock’s technical weakness suggest that downside risks remain elevated. Any failure to reclaim key moving averages or stabilise above recent lows could trigger further selling pressure.

Fundamental investors must weigh the company’s deteriorating Mojo Score and Strong Sell grade against sector trends and broader market conditions. While FMCG stocks often provide defensive qualities, Colgate’s current challenges may warrant a cautious approach or portfolio rebalancing towards stronger peers.

Traders utilising options should consider the cost and risk of put positions, especially as the February expiry approaches. The concentration of open interest and turnover at the ₹2,100 strike price may lead to increased volatility and price swings, presenting both opportunities and risks depending on market developments.

Conclusion

Colgate-Palmolive (India) Ltd’s prominence in put option trading underscores a growing bearish consensus and heightened hedging activity. The stock’s recent price lows, technical underperformance, and fundamental downgrades have combined to create a challenging environment for investors. Market participants should remain vigilant, analysing both option market signals and company fundamentals to navigate the evolving landscape effectively.

As the 24 February 2026 expiry approaches, the interplay between option positioning and share price movements will be critical in determining Colgate-Palmolive’s near-term trajectory within the FMCG sector.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →