Dixon Technologies Sees Heavy Put Option Activity Signalling Bearish Sentiment Ahead of January Expiry

Intense Put Option Trading Highlights Bearish Outlook

Data from the derivatives market reveals that Dixon Technologies has attracted substantial put option interest, particularly for contracts expiring on 27 January 2026. The strike prices with the highest activity are ₹12,000, ₹11,500, ₹11,000, and ₹10,000, reflecting a broad range of bearish bets and protective hedges below the current underlying value of ₹11,855.

Specifically, the ₹12,000 strike put options recorded 1,469 contracts traded, generating a turnover of ₹408.71 lakhs and an open interest of 2,900 contracts. The ₹11,000 strike saw the highest volume with 2,062 contracts traded and an open interest of 3,242, accompanied by a turnover of ₹205.81 lakhs. Meanwhile, the ₹11,500 strike had 1,345 contracts traded with a turnover of ₹230.27 lakhs and open interest of 2,083. The ₹10,000 strike, though lower in strike price, still registered 1,022 contracts traded and an open interest of 2,958, with turnover of ₹32.18 lakhs.

This concentration of put option activity at strikes below the current market price suggests that investors are positioning for potential downside or seeking to hedge existing long exposures. The open interest figures indicate sustained interest rather than short-term speculative spikes, pointing to a cautious market stance heading into early 2026.

Price and Technical Context

Dixon Technologies closed the latest trading session at ₹11,855, hovering just 2.3% above its 52-week low of ₹11,646. This proximity to the annual low has likely contributed to the increased put option interest as traders anticipate further downside or volatility. The stock’s one-day return of 0.61% was broadly in line with the Electronics & Appliances sector’s 0.63% gain and outpaced the Sensex’s 0.17% rise, indicating relative stability despite bearish option positioning.

However, technical indicators paint a more cautious picture. The stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a persistent downtrend. Notably, Dixon Technologies has just reversed a seven-day losing streak, which may offer short-term relief but does not yet confirm a sustained recovery.

Investor participation has risen sharply, with delivery volumes on 30 December reaching 5.84 lakh shares, a 105.37% increase over the five-day average. This surge in delivery volume suggests that long-term investors are either accumulating at lower levels or repositioning amid the volatile environment. Liquidity remains robust, with the stock capable of handling trade sizes up to ₹25.22 crore based on 2% of the five-day average traded value.

Mojo Score and Analyst Ratings Reflect Cautious Stance

Dixon Technologies currently holds a Mojo Score of 57.0, placing it in the 'Hold' category. This represents a downgrade from its previous 'Buy' rating as of 3 November 2025, signalling a tempered outlook from analysts. The market capitalisation grade stands at 2, reflecting its mid-cap status with a market cap of approximately ₹71,845.85 crore.

The downgrade aligns with the technical weakness and increased put option activity, suggesting that market participants and analysts alike are factoring in potential headwinds. While the company operates in the resilient Electronics & Appliances sector, the current environment demands caution given the stock’s recent price action and investor sentiment.

Expiry Patterns and Implications for January 2026

The expiry date of 27 January 2026 is attracting the bulk of put option interest, indicating that investors are focusing their hedging and speculative strategies on the near-term horizon. The clustering of open interest around the ₹11,000 and ₹12,000 strikes suggests a key support zone that traders are monitoring closely. Should the stock breach these levels, it could trigger further downside momentum, validating the bearish positioning.

Conversely, if Dixon Technologies manages to hold above these strikes, the put option premiums may decay, benefiting option sellers and potentially signalling a stabilisation in price. The interplay between these strike prices and the underlying stock movement will be critical in shaping market sentiment in the coming weeks.

Investor Strategies: Hedging and Speculation

The surge in put option volumes at multiple strike prices indicates a dual strategy among market participants. Long-term holders of Dixon Technologies shares may be purchasing puts as insurance against further declines, effectively hedging their portfolios. This is a prudent approach given the stock’s proximity to its 52-week low and the prevailing downtrend across moving averages.

Simultaneously, speculative traders appear to be betting on a correction or increased volatility by acquiring puts at strikes ranging from ₹10,000 to ₹12,000. The substantial turnover figures, particularly at the ₹12,000 strike with over ₹408 lakhs in traded premium, underscore the conviction behind these bearish positions.

Open interest data further supports the notion of sustained bearish sentiment, as large numbers of contracts remain outstanding rather than being closed out. This suggests that investors are preparing for a potentially volatile start to 2026, with downside risks priced into the options market.

Sector and Market Context

Dixon Technologies operates within the Electronics & Appliances sector, which has shown moderate gains recently, with a sector return of 0.63% on the latest trading day. The broader Sensex index rose by 0.17%, indicating a relatively stable market environment. Despite this, Dixon’s technical weakness and option market activity highlight company-specific concerns that may not be reflected in the wider sector performance.

Investors should consider these dynamics carefully, balancing sector strength against individual stock vulnerabilities. The mid-cap nature of Dixon Technologies adds an additional layer of volatility, as mid-cap stocks often experience sharper price swings compared to large-cap peers.

Conclusion: Cautious Outlook Amid Elevated Put Option Interest

The pronounced put option activity in Dixon Technologies signals a cautious or bearish stance among investors heading into early 2026. With significant open interest clustered at strikes below the current market price, the options market is pricing in potential downside or volatility. Technical indicators corroborate this view, with the stock trading below all major moving averages and near its 52-week low.

While the recent reversal after a seven-day decline offers some respite, the overall trend remains subdued. Investors holding Dixon Technologies shares may consider protective strategies, while prospective buyers should weigh the risks carefully. Monitoring the January 2026 expiry and associated strike price levels will be crucial for gauging future price direction and sentiment shifts.

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