Divis Laboratories Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Trading Highlights

Data from the derivatives market reveals that Divis Laboratories Ltd (underlying symbol: DIVISLAB) has emerged as one of the most actively traded stocks in put options for the upcoming expiry on 27 January 2026. The strike prices attracting the highest volumes are ₹6,400, ₹6,300, and ₹6,200, all clustered near the current underlying value of ₹6,364.0.

The most notable activity is at the ₹6,400 strike, where 5,181 put contracts changed hands, generating a turnover of ₹642.65 lakhs and an open interest of 1,062 contracts. This is closely followed by the ₹6,200 strike, which saw 2,934 contracts traded with a turnover of ₹142.33 lakhs and a significantly higher open interest of 2,278 contracts. The ₹6,300 strike also recorded substantial activity with 2,056 contracts traded and a turnover of ₹173.26 lakhs, alongside an open interest of 878 contracts.

The concentration of put option volumes and open interest around these strike prices indicates a pronounced bearish bias or hedging strategy among market participants. Investors appear to be positioning for potential downside or protecting existing long exposures as the stock approaches expiry.

Stock Performance and Market Context

Divis Laboratories Ltd has underperformed its sector and the broader market in recent sessions. On 12 January 2026, the stock declined by 3.46%, significantly lagging the Pharmaceuticals & Biotechnology sector’s 1.13% drop and the Sensex’s modest 0.47% fall. Intraday, the stock touched a low of ₹6,365, down 3.8%, with the weighted average traded price skewed towards the lower end, reflecting selling pressure.

Technical indicators show the stock trading above its 100-day and 200-day moving averages, signalling long-term support, but below the 5-day, 20-day, and 50-day averages, highlighting short-term weakness. This mixed technical picture aligns with the cautious stance observed in options markets.

Investor participation has risen, with delivery volumes reaching 1.85 lakh shares on 9 January, a 6.53% increase over the five-day average, suggesting active trading interest despite the recent price softness. Liquidity remains robust, with the stock capable of handling trade sizes up to ₹5.41 crore based on 2% of the five-day average traded value.

Mojo Score and Analyst Ratings

MarketsMOJO assigns Divis Laboratories Ltd a Mojo Score of 64.0, categorising it as a ‘Hold’ with a recent downgrade from a ‘Buy’ rating on 1 December 2025. The downgrade reflects a reassessment of the company’s near-term growth prospects amid sector headwinds and valuation concerns. The Market Cap Grade remains at 1, indicating its status as a large-cap stock with a market capitalisation of approximately ₹1,75,592 crore.

This rating shift aligns with the increased put option activity, suggesting that investors and analysts alike are adopting a more cautious outlook. The downgrade may also be influenced by the stock’s recent underperformance relative to its sector and the broader market indices.

Expiry Patterns and Investor Implications

The expiry date of 27 January 2026 is critical, as the clustering of put option volumes near the current stock price indicates that investors are actively hedging against potential declines or speculating on downside moves. The high open interest at the ₹6,200 strike, well below the current price, suggests a significant number of investors are positioning for a possible correction or are protecting profits from earlier gains.

Such activity often precedes increased volatility around expiry, as traders adjust or unwind positions. For long-term investors, this may signal a need to monitor the stock closely for any fundamental developments or sector news that could impact performance.

Sector and Industry Considerations

Divis Laboratories operates within the Pharmaceuticals & Biotechnology sector, a space characterised by innovation, regulatory scrutiny, and cyclical demand patterns. While the sector has shown resilience, recent global macroeconomic uncertainties and supply chain disruptions have introduced volatility.

Within this context, the stock’s recent dip and the surge in put option interest may reflect broader sector concerns, including pricing pressures and competitive dynamics. Investors should weigh these factors alongside company-specific fundamentals when assessing risk.

Conclusion: Navigating Cautious Waters

The pronounced put option activity in Divis Laboratories Ltd ahead of the January expiry, coupled with its recent price underperformance and a downgrade in analyst rating, underscores a cautious market stance. While the company remains a large-cap heavyweight with solid long-term prospects, near-term headwinds and increased bearish positioning warrant careful monitoring.

Investors should consider the implications of rising open interest in puts as a signal of potential volatility and hedge accordingly. Diversification and active portfolio management remain key, especially in sectors subject to rapid change and regulatory developments.

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