Eicher Motors Sees Heavy Put Option Activity Ahead of February Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Eicher Motors witnessed 2,600 put contracts traded at the ₹8,000 strike price expiring on 24 February 2026. This activity generated a turnover of ₹1.21 crores and an open interest of 1,447 contracts, indicating a significant build-up of bearish bets or protective hedges. The underlying stock price currently stands at ₹8,110.5, just above the strike price, which is a critical technical level for traders.

The concentration of put options at this strike suggests that market participants are positioning for a potential pullback or are seeking downside protection amid recent gains. The expiry date being just days away adds urgency to these trades, as investors adjust their portfolios ahead of the settlement.

Stock Performance and Technical Context

Interestingly, Eicher Motors has been on a strong upward trajectory, hitting a fresh 52-week high of ₹8,137.5 on 19 February 2026. The stock outperformed its automobile sector peers by 0.99% today, delivering a 1.21% gain compared to the sector’s 0.23% and the Sensex’s marginal decline of 0.13%. This outperformance is supported by the stock trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling robust technical strength.

However, delivery volumes tell a more nuanced story. On 18 February, the delivery volume was 1.22 lakh shares, which represents a sharp 72.1% decline against the five-day average delivery volume. This drop in investor participation could imply that the recent rally is driven more by short-term traders or institutional flows rather than sustained buying interest from retail investors.

Investor Sentiment and Market Cap Insights

Eicher Motors is classified as a large-cap stock with a market capitalisation of ₹2,19,815 crores, placing it among the heavyweight constituents of the automobile sector. The company’s Mojo Score stands at 78.0, reflecting a strong buy recommendation, an upgrade from a previous hold rating as of 11 November 2025. This upgrade underscores improved fundamentals and positive outlook from analysts.

Despite the bullish technicals and positive ratings, the surge in put option activity suggests that some investors are either hedging their long positions or speculating on a short-term correction. This duality is common in large-cap stocks that have recently rallied sharply, as market participants seek to balance risk and reward amid uncertain macroeconomic conditions.

Expiry Patterns and Strategic Positioning

The 24 February expiry is a key event for options traders, as it marks the settlement of monthly contracts. The heavy put option volume at the ₹8,000 strike price indicates that traders are closely watching this level as a potential support zone. Should the stock price dip below this threshold, it could trigger further downside momentum, prompting additional put buying or stop-loss selling.

Conversely, if Eicher Motors maintains its current levels or advances, these put options may expire worthless, benefiting option sellers who have collected premiums. This dynamic creates a tug-of-war scenario between bullish and bearish forces, adding to the stock’s near-term volatility.

Liquidity and Trading Considerations

Liquidity remains adequate for Eicher Motors, with the stock’s traded value supporting a trade size of approximately ₹10.6 crores based on 2% of the five-day average traded value. This ensures that institutional and retail investors can execute sizeable trades without significant market impact, facilitating active options and cash market participation.

Investors should also note the divergence between price strength and falling delivery volumes, which may signal caution. A sustained rally typically requires strong delivery volumes to confirm genuine buying interest, whereas a decline in delivery volumes can precede price corrections.

Broader Market Context and Sector Comparison

Within the automobile sector, Eicher Motors has distinguished itself by outperforming peers and maintaining a strong technical setup. The sector’s modest 0.23% gain today contrasts with Eicher’s 1.21% rise, highlighting its relative strength. This outperformance is supported by the company’s robust product portfolio and steady demand for premium motorcycles, which underpin its earnings growth prospects.

However, the broader market environment remains mixed, with the Sensex declining by 0.13% on the same day. This divergence suggests that while large-cap stocks like Eicher Motors attract investor interest, overall market sentiment is cautious, possibly due to macroeconomic uncertainties or geopolitical factors.

Implications for Investors

For investors, the current scenario presents a nuanced picture. The strong technicals and upgraded buy rating from MarketsMOJO support a positive medium-term outlook. Yet, the surge in put option activity and declining delivery volumes warrant vigilance for potential short-term corrections or volatility spikes.

Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels around the ₹8,000 mark. Conversely, traders with a bearish view might exploit the elevated put open interest to position for a pullback, especially if the stock fails to sustain above key moving averages.

Overall, Eicher Motors remains a key stock to watch in the automobile sector, balancing strong fundamentals with tactical market positioning ahead of the February expiry.

Conclusion

Eicher Motors Ltd’s recent surge in put option trading at the ₹8,000 strike price ahead of the 24 February expiry highlights a complex interplay of bullish fundamentals and cautious market sentiment. While the stock’s technical strength and upgraded Mojo Grade of Buy reflect confidence in its growth trajectory, the heavy put activity signals that investors are hedging against near-term risks. This duality underscores the importance of a balanced approach for investors navigating the evolving market landscape.

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