Eicher Motors Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 28 January 2026, Eicher Motors Ltd (NSE: EICHERMOT) emerged as one of the most actively traded stocks in the put options segment. The two most heavily traded put strikes expiring on 24 February 2026 were ₹6,900 and ₹6,800. At the ₹6,900 strike, 2,789 contracts changed hands, generating a turnover of ₹613.36 lakhs, while open interest stood at 790 contracts. The ₹6,800 strike saw even higher activity with 3,196 contracts traded, turnover of ₹539.93 lakhs, and open interest rising to 1,602 contracts.

The underlying stock price at the time was ₹6,894.5, placing these strikes just at or slightly below the current market level. This concentration of put option volume and open interest near the money suggests that traders are positioning for potential downside or are actively hedging existing long exposures.

Stock Performance and Technical Context

Eicher Motors has underperformed its sector by 3.1% on the day, with the stock touching an intraday low of ₹6,872.5, down 4.08%. The weighted average traded price skewed towards the lower end of the day’s range, indicating selling pressure. While the stock remains above its 200-day moving average, it is trading below its 5-day, 20-day, 50-day, and 100-day moving averages, signalling short- to medium-term weakness.

Investor participation has increased notably, with delivery volumes rising 56.69% to 3.05 lakh shares on 27 January compared to the five-day average. Liquidity remains robust, supporting trade sizes up to ₹5.82 crore comfortably.

Bearish Positioning and Hedging Implications

The surge in put option volumes at strikes close to the current market price is a classic indicator of bearish sentiment or protective hedging. Investors holding long positions in Eicher Motors may be buying puts to limit downside risk amid recent volatility and sector underperformance. Alternatively, speculators could be betting on a further decline in the stock price over the next month.

Open interest data reinforces this view, with the ₹6,800 strike showing a substantial build-up of 1,602 contracts, more than double that at ₹6,900. This suggests a stronger conviction around downside protection or bearish bets at the slightly lower strike.

Fundamental and Market Context

Eicher Motors, a large-cap automobile company with a market capitalisation of ₹1,91,337 crore, operates in a sector currently facing headwinds from rising input costs and subdued demand. Despite these challenges, the company was upgraded from Hold to Buy on 11 November 2025, reflecting improved fundamentals and growth prospects. The current Mojo Score of 71.0 and a Mojo Grade of Buy indicate favourable medium-term outlooks, although the recent price action and option market activity suggest caution in the short term.

Comparatively, the stock’s 1-day return of -4.09% contrasts with the sector’s -0.91% and the Sensex’s positive 0.43%, highlighting relative weakness. This divergence may be driving the increased put option interest as investors seek to hedge or capitalise on potential further declines.

Expiry Patterns and Outlook

The 24 February 2026 expiry is attracting significant attention, with put options at the ₹6,900 and ₹6,800 strikes dominating volumes and open interest. This expiry falls just under a month away, indicating that traders are positioning for near-term developments that could impact the stock price.

Given the stock’s current technical weakness and sector challenges, the elevated put option activity may reflect expectations of further downside or at least a cautious stance. However, the company’s strong fundamentals and recent upgrade suggest that any decline could be temporary, potentially offering buying opportunities for long-term investors.

Market participants should monitor open interest changes and price movements closely in the coming weeks to gauge whether bearish sentiment intensifies or eases ahead of expiry.

Investor Takeaways

For investors in Eicher Motors Ltd, the current option market dynamics underscore the importance of risk management. The heavy put option activity near the money signals that downside protection is in demand, either as a hedge or speculative play. While the stock’s large-cap status and positive Mojo Grade support a constructive medium-term view, short-term volatility remains a risk.

Those considering fresh positions should weigh the technical signals and option market sentiment carefully, possibly employing protective strategies such as buying puts or setting stop-loss levels. Conversely, long-term investors may view any price weakness as an opportunity to accumulate shares at more attractive valuations.

Conclusion

Eicher Motors Ltd’s recent surge in put option trading ahead of the 24 February 2026 expiry highlights a cautious market stance amid sector headwinds and technical weakness. The concentration of open interest at ₹6,900 and ₹6,800 strikes reflects heightened bearish positioning and hedging activity. Despite this, the company’s upgraded Buy rating and solid fundamentals provide a counterbalance, suggesting that investors should remain vigilant but not overly pessimistic.

As expiry approaches, monitoring option volumes, open interest, and price action will be crucial for assessing the evolving market sentiment and potential trading opportunities in this large-cap automobile stock.

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