Dixon Technologies Sees Heavy Put Option Activity Amid Mixed Market Signals

Put Option Activity Highlights

The put options for Dixon Technologies expiring on 24 February 2026 have witnessed robust trading volumes, with 2,839 contracts traded at the ₹10,500 strike and 3,053 contracts at the ₹10,000 strike. The turnover for these contracts stands at ₹283.5 lakhs and ₹146.6 lakhs respectively, reflecting substantial investor interest in downside protection. Open interest remains elevated at 2,228 contracts for the ₹10,500 strike and 3,346 contracts for the ₹10,000 strike, indicating sustained bearish sentiment or hedging activity ahead of the expiry.

The underlying stock price currently hovers around ₹11,000, placing these put strikes approximately 5.5% and 9% below the current market level. This positioning suggests that investors are either anticipating a correction or are actively seeking to hedge existing long positions against a potential pullback in the near term.

Stock Performance and Market Context

Dixon Technologies has outperformed its sector peers and the broader market in recent sessions. The stock has gained 6.69% today, opening with a gap-up of 7.36% and touching an intraday high of ₹11,200, marking an 8.33% rise. Over the last two days, the stock has delivered an impressive 8.33% return, outperforming the Consumer Durables - Electronics sector, which gained 7.75%, and the Sensex, which rose 2.56% on the same day.

Despite this strong short-term momentum, the stock remains below its 20-day, 50-day, 100-day, and 200-day moving averages, signalling that the broader trend may still be under pressure. The 5-day moving average is currently the only short-term technical level the stock is trading above, indicating a possible early stage of recovery or consolidation.

Investor participation, however, has shown signs of moderation. Delivery volumes on 2 February fell by 23.34% compared to the five-day average, with 1.84 lakh shares delivered. This decline in investor commitment could be a factor prompting increased put option activity as traders seek downside protection amid uncertain participation levels.

Investor Sentiment and Hedging Implications

The pronounced put option volumes at strikes below the current market price reflect a cautious stance among investors. While the stock’s recent gains have been encouraging, the elevated open interest in puts suggests that market participants are either positioning for a potential correction or actively hedging their long exposure.

Such hedging activity is common in mid-cap stocks like Dixon Technologies, which, despite a market cap of ₹66,827.14 crores, can exhibit volatility due to sector-specific dynamics and broader macroeconomic factors affecting the electronics and appliances industry.

The Mojo Score for Dixon Technologies currently stands at 51.0, with a Mojo Grade of Hold, downgraded from Buy on 3 November 2025. This reflects a tempered outlook by analysts, who may be factoring in the recent volatility and mixed technical signals. The Market Cap Grade is 2, indicating mid-cap status with moderate liquidity and market presence.

Sector and Market Comparison

Within the Consumer Durables - Electronics sector, Dixon Technologies has demonstrated relative strength, outperforming the sector by 0.45% today. However, the sector itself has gained 7.75%, slightly ahead of Dixon’s 6.69% rise, suggesting that while the stock is performing well, it is not leading the pack.

Liquidity metrics indicate that the stock is sufficiently liquid for sizeable trades, with the ability to handle trade sizes up to ₹25 crores based on 2% of the five-day average traded value. This liquidity supports active options trading and facilitates the execution of hedging strategies by institutional and retail investors alike.

Outlook and Strategic Considerations

Investors should closely monitor the evolving options landscape for Dixon Technologies as the 24 February expiry approaches. The concentration of put options at the ₹10,000 and ₹10,500 strikes may act as psychological support levels, with potential for increased volatility if the stock approaches these prices.

Given the mixed technical signals—short-term momentum contrasted with longer-term moving averages still trending lower—market participants may adopt a cautious approach. The elevated put open interest could also indicate that institutional investors are employing protective strategies amid broader market uncertainties.

For traders and portfolio managers, the current environment suggests a balanced approach: recognising the stock’s recent gains and sector outperformance while respecting the downside risks implied by options market activity. Monitoring delivery volumes and price action in the coming days will be critical to gauge whether the bullish momentum can sustain or if a correction is imminent.

Fundamental and Technical Summary

Dixon Technologies operates in the Electronics & Appliances industry, a sector that has shown resilience but remains sensitive to global supply chain dynamics and consumer demand fluctuations. The company’s mid-cap status and a market cap of ₹66,827.14 crores position it well within the competitive landscape, though it faces challenges reflected in its recent downgrade from Buy to Hold by MarketsMOJO analysts.

The stock’s current Mojo Score of 51.0 and Market Cap Grade of 2 suggest moderate quality and market standing. Investors should weigh these factors alongside the technical indicators and options market signals to make informed decisions.

Overall, the surge in put option activity underscores a market environment where caution and hedging are prudent, even as Dixon Technologies demonstrates pockets of strength within its sector.

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