Dixon Technologies Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Trading Volume and Strike Price Concentration

Data from the derivatives market reveals significant put option volumes for Dixon Technologies, with contracts clustered around key strike prices close to the current underlying value of ₹12,509. The most actively traded put options include strikes at ₹12,500, ₹12,000, ₹11,750, ₹11,500, and ₹12,250, all expiring on 30 December 2025.

The ₹12,500 strike price recorded the highest number of contracts traded at 10,617, generating a turnover of approximately ₹1,070.99 lakhs and an open interest of 5,922 contracts. This is closely followed by the ₹12,000 strike with 11,520 contracts traded, turnover of ₹385.75 lakhs, and open interest of 6,150 contracts. The ₹12,250 strike also saw substantial activity with 5,922 contracts traded and turnover of ₹342.08 lakhs.

Lower strike prices such as ₹11,750 and ₹11,500 also attracted considerable volumes, with 3,706 and 4,766 contracts traded respectively, indicating a broad range of put option interest spanning from slightly out-of-the-money to near-the-money positions.

Open Interest and Market Sentiment

Open interest figures further underscore the sustained interest in put options for Dixon Technologies. The combined open interest across these strikes exceeds 19,000 contracts, reflecting a sizeable pool of outstanding positions that may be used for hedging or speculative purposes. The concentration of open interest near the current stock price suggests that investors are positioning for potential downside risk or seeking protection against further declines.

Such activity often points to a cautious or bearish sentiment prevailing in the market, especially when accompanied by a series of price declines and underperformance relative to sector benchmarks.

Price Performance and Technical Indicators

Dixon Technologies has been trading near its 52-week low, currently about 3% above the lowest level of ₹12,130. The stock has underperformed its sector by 0.4% on the day and has recorded a consecutive five-day decline, resulting in a cumulative return of -5.97% over this period. This downward trend is further reflected in the stock trading below its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a bearish technical setup.

Investor participation has shown signs of rising, with delivery volumes reaching 2.44 lakh shares on 24 December, representing a 23.7% increase compared to the five-day average delivery volume. This heightened activity may indicate increased interest in the stock, possibly driven by hedging strategies or speculative positioning ahead of the expiry.

Liquidity and Market Capitalisation Context

Dixon Technologies is classified as a mid-cap company with a market capitalisation of approximately ₹75,857.18 crores. The stock’s liquidity profile supports sizeable trade volumes, with the average traded value over five days sufficient to accommodate trade sizes of around ₹17.01 crores. This liquidity facilitates active participation from institutional and retail investors alike, particularly in the derivatives segment.

The stock’s one-day return of -1.02% contrasts with the sector’s decline of -0.74% and the Sensex’s marginal fall of -0.19%, highlighting a relative underperformance that may be influencing the put option activity observed.

Expiry Patterns and Investor Behaviour

The concentration of put option activity around the 30 December 2025 expiry date suggests that market participants are positioning ahead of the year-end expiry cycle. This period often sees increased volatility and strategic adjustments as investors manage risk and rebalance portfolios.

Put options at strike prices near the current market value typically serve as protective hedges against further downside or as speculative bets anticipating a decline. The substantial turnover and open interest at these strikes indicate that investors are actively managing exposure to potential price movements in Dixon Technologies.

Implications for Investors and Market Outlook

The pronounced put option activity in Dixon Technologies reflects a market environment where investors are seeking downside protection or expressing caution about near-term price movements. The stock’s proximity to its 52-week low, combined with its trading below all major moving averages, supports the view that market participants are factoring in potential volatility or further price corrections.

While the increased delivery volumes indicate rising investor engagement, the overall trend suggests a defensive stance. Investors holding Dixon Technologies shares may consider monitoring option market trends closely as they provide valuable insights into market sentiment and risk management strategies.

Given the stock’s liquidity and mid-cap status, the derivatives market offers a viable avenue for hedging or tactical positioning, especially as the December expiry approaches. Market participants should also weigh sector dynamics and broader market conditions when assessing the stock’s outlook.

Summary

Dixon Technologies (India) Ltd is currently witnessing significant put option trading activity concentrated around strike prices near its current market value, with expiry set for 30 December 2025. This activity, coupled with recent price declines and technical indicators, points to a cautious market stance with investors employing options for hedging or bearish positioning. The stock’s liquidity and market capitalisation support active trading, making it a focal point for derivatives market participants as the year-end expiry approaches.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →