Eternal Ltd Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Surge Reflects Investor Caution

On 27 January 2026 expiry, Eternal Ltd’s put options at the ₹250 strike price saw an impressive 5,466 contracts traded, generating a turnover of ₹144.48 lakhs. The open interest stands at 1,154 contracts, indicating sustained interest in downside protection or speculative bearish bets. This activity is particularly notable given the underlying stock price of ₹252.75, hovering just above the strike price, suggesting that traders are positioning for a potential decline below this critical level.

The weighted average price of traded options clustered near the day’s low, reinforcing the bearish bias. This pattern often indicates that market participants are either hedging existing long positions or outright betting on further price weakness. The expiry date being imminent adds urgency to these positions, as traders seek to capitalise on or protect against short-term volatility.

Stock Performance and Technical Indicators

Eternal Ltd has been under pressure in recent sessions, underperforming its sector by 2.12% on the day and falling 2.34% compared to the Sensex’s modest 0.16% gain. The stock has declined for three consecutive days, losing 10.9% over this period. Intraday lows touched ₹250.65, close to the put option strike price, signalling a critical support test.

Technically, Eternal is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — a clear indication of a downtrend. The declining investor participation, with delivery volumes falling 1.78% against the five-day average, suggests waning conviction among buyers. Despite sufficient liquidity to support trades up to ₹56.28 crores, the stock’s momentum remains subdued.

Market Capitalisation and Sector Context

With a market capitalisation of ₹2,50,764 crores, Eternal Ltd is classified as a large-cap stock within the E-Retail and E-Commerce sector. Despite its size, the company’s mojo score of 37.0 and a recent downgrade from Hold to Sell on 23 October 2025 reflect deteriorating fundamentals or market sentiment. The market cap grade of 1 further underscores the cautious stance adopted by analysts and investors alike.

Bearish Positioning and Hedging Strategies

The concentration of put option activity at the ₹250 strike price, just below the current market price, suggests that investors are bracing for a potential breakdown of this support level. Such positioning is typical in scenarios where traders anticipate further downside or seek to hedge against existing long exposures.

Open interest of 1,154 contracts at this strike is significant, indicating that many market participants have not yet closed or exercised their positions. This sustained interest could lead to increased volatility as expiry approaches, especially if the stock price moves closer to or below ₹250.

Moreover, the fact that Eternal Ltd’s put options turnover reached ₹144.48 lakhs on a single expiry day highlights the scale of bearish sentiment. This level of activity is often a precursor to heightened price swings, as option writers and holders adjust their positions in response to market developments.

Sector and Market Implications

The E-Retail and E-Commerce sector has faced mixed fortunes recently, with some stocks showing resilience while others, like Eternal Ltd, struggle amid competitive pressures and shifting consumer trends. Eternal’s underperformance relative to its sector peers by over 2% on the day emphasises the challenges it faces.

Investors should note that the stock’s falling moving averages and declining delivery volumes signal weakening demand. Combined with the heavy put option activity, this paints a cautious picture for Eternal Ltd in the near term.

Investor Takeaways and Outlook

For investors, the current scenario suggests prudence. Eternal Ltd’s downgrade to a Sell rating by MarketsMOJO, combined with its low mojo score and deteriorating technicals, warrants a cautious approach. The heavy put option activity at the ₹250 strike price indicates that market participants expect further downside or are actively hedging against it.

Traders should monitor the stock’s price action closely as the 27 January expiry approaches. A breach below ₹250 could trigger accelerated selling pressure, while a rebound above key moving averages might alleviate some bearish concerns. However, given the prevailing trends and option market signals, the risk-reward profile currently favours defensive positioning.

In the broader context, Eternal Ltd’s challenges reflect the competitive dynamics within the E-Retail and E-Commerce sector, where rapid innovation and consumer behaviour shifts demand constant adaptation. Investors may wish to explore alternative stocks within the sector or across other market caps that offer more favourable momentum and fundamental prospects.

Conclusion

The surge in put option trading for Eternal Ltd at the ₹250 strike price, coupled with the stock’s technical weakness and recent downgrade, underscores a bearish market sentiment. While the company remains a large-cap heavyweight in its sector, current indicators suggest that investors are positioning for potential near-term declines or hedging existing exposures. Careful monitoring of price levels and option market activity will be crucial for navigating the evolving landscape.

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