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

Put Option Activity Highlights

Data from the latest derivatives market session reveals that Dixon Technologies’ put options have attracted significant attention, with five key strike prices registering heavy trading volumes and turnover. The underlying stock closed at ₹10,265, hovering close to its 52-week low of ₹9,835, just 4.7% away, which may be contributing to the cautious stance among traders.

The most actively traded put strike was ₹10,400, with 2,179 contracts exchanged, generating a turnover of ₹507.01 lakhs and an open interest of 732 contracts. This was closely followed by the ₹10,300 strike, which saw 1,942 contracts traded and a turnover of ₹417.66 lakhs. Lower strikes such as ₹9,500 and ₹9,000 also saw robust activity, with 1,834 and 1,786 contracts traded respectively, and open interest levels of 1,677 and 1,929 contracts, indicating sustained bearish positioning at these levels.

The ₹10,200 strike, despite being slightly out of the money, recorded 1,679 contracts traded with a turnover of ₹333.32 lakhs and an open interest of 730 contracts. This distribution of put option interest across strikes from ₹9,000 to ₹10,400 suggests a broad range of downside protection or speculative bets on a price correction.

Expiry Patterns and Market Implications

All the put options in focus are set to expire on 30 March 2026, giving investors roughly a month to assess the stock’s trajectory. The clustering of open interest and turnover near and slightly above the current market price points to a hedging strategy by institutional investors or traders anticipating volatility. The sizeable open interest at the ₹9,000 and ₹9,500 strikes, well below the current price, may indicate expectations of a potential price drop or a desire to protect profits from earlier gains.

Interestingly, the stock has recently reversed after eight consecutive days of decline, gaining 1.32% on the latest session and outperforming its sector by 0.97%. However, it remains below all major moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), signalling a persistent bearish trend in the medium term. The delivery volume has also declined by 1.66% compared to the five-day average, suggesting waning investor participation despite the uptick in price.

Investor Sentiment and Technical Context

Dixon Technologies currently holds a Mojo Score of 51.0 with a Mojo Grade of Hold, downgraded from Buy on 3 November 2025. This reflects a cautious stance by analysts amid mixed signals from the stock’s price action and sector performance. The company’s market capitalisation stands at ₹61,524 crores, categorising it as a mid-cap entity within the Electronics & Appliances sector.

Despite the recent price rebound, the stock remains vulnerable given its position below all key moving averages and proximity to its 52-week low. The put option activity corroborates this view, as market participants appear to be either hedging against further downside or speculating on a correction. The liquidity profile remains adequate, with the stock’s average traded value supporting trade sizes up to ₹11.88 crores, ensuring smooth execution of large option trades.

Sector-wise, the Electronics & Appliances segment has shown modest gains, but Dixon’s outperformance on the day (+1.32%) versus the sector (+0.56%) and the Sensex’s decline (-0.54%) suggests some selective buying interest. However, the overall trend remains bearish, as reflected in the option market positioning.

Put Options as a Barometer of Bearish Positioning

Put options are often used by investors to hedge long stock positions or to speculate on declines. The heavy volumes and open interest at strikes both near and below the current market price indicate a significant degree of bearish sentiment or risk aversion. The concentration of open interest at ₹9,000 and ₹9,500 strikes, in particular, points to a market expectation that the stock could test these lower levels before expiry.

Moreover, the turnover figures highlight that the ₹10,400 and ₹10,300 strikes are the most expensive and actively traded puts, suggesting that some investors are willing to pay a premium for downside protection just above the current price. This may reflect concerns about near-term volatility or potential negative catalysts in the electronics sector or broader market.

Outlook and Investor Takeaways

For investors, the current put option activity in Dixon Technologies serves as a cautionary signal. While the stock has shown some resilience with a recent bounce, the dominant put volumes and open interest suggest that downside risks remain significant. Traders should closely monitor the stock’s ability to break above key resistance levels, particularly the ₹10,400 to ₹10,600 range, to gauge if the bearish sentiment is abating.

Long-term investors may consider the company’s fundamentals and sector outlook alongside technical signals. The Electronics & Appliances sector is subject to cyclical demand and supply chain dynamics, which could influence Dixon’s performance in the coming quarters. Meanwhile, the put option market indicates that many participants are either hedging existing positions or speculating on a correction, underscoring the need for prudent risk management.

In summary, the heavy put option trading in Dixon Technologies ahead of the 30 March expiry highlights a market bracing for volatility and potential downside. Investors should weigh these signals carefully against broader market trends and company-specific developments before making allocation decisions.

Company Snapshot

Dixon Technologies (India) Ltd operates in the Electronics & Appliances industry, with a market capitalisation of ₹61,524 crores. The stock’s recent performance has been mixed, with a day’s high of ₹10,586 (up 4.65%) but trading below all major moving averages. The Mojo Grade downgrade from Buy to Hold on 3 November 2025 reflects tempered analyst optimism amid challenging market conditions.

Technical Summary

The stock’s proximity to its 52-week low and the sustained put option interest at multiple strikes suggest a cautious technical outlook. The delivery volume decline and falling investor participation further reinforce the need for vigilance. However, the recent price rebound and outperformance relative to the sector hint at potential short-term support.

Final Thoughts

Market participants should continue to monitor option open interest and volume patterns as a barometer of investor sentiment. The concentrated put activity in Dixon Technologies signals a market expectation of volatility and possible downside, making it imperative for investors to adopt a balanced approach combining technical analysis with fundamental insights.

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