Dixon Technologies Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 23 February 2026, Dixon Technologies witnessed an extraordinary surge in put option contracts, with 11,701 contracts traded at the 10,500 strike price for the expiry date of 24 February 2026. This activity generated a turnover of approximately ₹30.13 crores, reflecting substantial investor interest in downside protection or bearish bets. The open interest at this strike stands at 2,295 contracts, indicating that a sizeable number of positions remain open, potentially influencing price dynamics in the near term.

The underlying stock price closed at ₹10,669, slightly above the put strike price, but the heavy put volume suggests market participants are bracing for a possible decline below this level. The weighted average price of traded options clustered near the day’s low, reinforcing the bearish sentiment.

Technical and Price Performance Context

Dixon Technologies has been under pressure, losing 9.13% over the past five consecutive trading sessions. On the day of the put option surge, the stock declined by 3.49%, underperforming its sector, Consumer Durables - Electronics, which fell by 3.03%. The stock’s intraday low touched ₹10,661, close to the put strike price, signalling a critical support test.

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a sustained downtrend. This technical weakness aligns with the increased put option activity, as investors seek to hedge existing long positions or speculate on further declines.

Investor participation has also waned, with delivery volumes falling by 0.45% against the five-day average, suggesting reduced conviction among buyers. Despite this, liquidity remains adequate, with the stock capable of handling trade sizes up to ₹13.16 crores based on 2% of the five-day average traded value.

Investor Sentiment and Market Implications

The pronounced put option activity at the 10,500 strike price, just below the current market price, suggests that investors are positioning for a potential correction or increased volatility in Dixon Technologies. This could be driven by concerns over the company’s near-term earnings outlook, sectoral headwinds, or broader market uncertainties.

With a Mojo Score of 51.0 and a current Mojo Grade of Hold, downgraded from Buy on 3 November 2025, the stock’s fundamental outlook appears cautious. The downgrade reflects tempered expectations amid recent price weakness and sectoral challenges. The company’s market capitalisation stands at ₹66,364 crores, placing it in the mid-cap category, which often experiences heightened volatility during market corrections.

Sector-wise, the Electronics & Appliances industry has been under pressure, with the Consumer Durables segment declining by 3.03% on the day. Dixon’s underperformance relative to its sector peers further accentuates the bearish mood among investors.

Expiry Patterns and Strategic Positioning

The expiry date of 24 February 2026 is imminent, and the concentration of put options at the 10,500 strike price indicates a critical level for traders to watch. Should the stock close below this strike at expiry, put holders stand to gain, potentially triggering further downside momentum as stop-losses and protective hedges are activated.

Conversely, if the stock manages to hold above this level, some of the bearish pressure may ease, but the technical indicators suggest that a sustained recovery would require a break above key moving averages, which currently act as resistance.

Market participants should also consider the open interest build-up, which can amplify price moves near expiry. The sizeable open interest at this strike price may lead to increased volatility as traders adjust or unwind positions in the final trading sessions.

Broader Market Context and Outlook

While the Sensex posted a modest gain of 0.38% on the day, Dixon Technologies’ decline and heavy put option activity highlight a divergence from broader market optimism. This divergence underscores sector-specific challenges and company-specific concerns that investors must weigh carefully.

Given the stock’s current technical weakness, falling investor participation, and bearish derivatives positioning, cautious investors may prefer to monitor price action closely before initiating fresh long positions. Hedging strategies using put options appear justified in the current environment, especially for those with existing exposure.

Fundamental investors should also note the recent downgrade from Buy to Hold by MarketsMOJO, reflecting a more guarded stance on the company’s near-term prospects. The mid-cap status of Dixon Technologies adds an additional layer of volatility risk, which may not suit risk-averse portfolios at this juncture.

In summary, the surge in put option activity at the 10,500 strike price ahead of the 24 February expiry signals a market expectation of continued pressure on Dixon Technologies’ share price. Investors and traders should remain vigilant to technical developments and expiry dynamics that could influence the stock’s trajectory in the coming days.

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