Eternal Ltd Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Intense Put Option Trading Highlights Bearish Positioning

Data from the derivatives market reveals that Eternal Ltd’s put options have been the most actively traded among its peers, with four strike prices attracting substantial volumes. The 250 strike price put option led the activity with 3,212 contracts traded, generating a turnover of ₹750.09 lakhs and an open interest of 2,699 contracts. This strike price is particularly noteworthy as it closely aligns with the current underlying stock price of ₹250.20, indicating that traders are positioning for a potential decline or hedging existing long exposures.

Other significant put strikes include 255, 245, and 240, with 1,672, 1,239, and 1,635 contracts traded respectively. The 255 strike, slightly above the current market price, saw a turnover of ₹487.77 lakhs and open interest of 1,296, while the 240 strike, below the current price, recorded 1,635 contracts traded and an open interest of 1,565. The 245 strike also attracted notable activity with 1,239 contracts and 1,176 open interest. This distribution of put option interest around the current price level suggests a broad-based bearish outlook or protective hedging across a range of price points.

Stock Performance and Technical Weakness

Eternal Ltd’s recent price action corroborates the cautious stance observed in the options market. The stock has underperformed its sector by 1.32% on the day and has been on a downward trajectory for eight consecutive sessions, losing 12.84% over this period. It currently trades below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained technical weakness and a lack of near-term buying interest.

Investor participation has notably increased, with delivery volumes surging to 7.31 crore shares on 25 February 2026, a 231.65% rise compared to the five-day average. This heightened activity, combined with the stock’s liquidity supporting trade sizes up to ₹28.5 crore, indicates that market participants are actively repositioning amid the prevailing bearish sentiment.

Mojo Score and Rating Downgrade Reflect Growing Concerns

Eternal Ltd’s Mojo Score currently stands at 31.0, categorised as a Sell grade, a downgrade from Hold on 23 October 2025. This rating shift reflects deteriorating fundamentals and technical indicators, signalling caution for investors. The company’s market capitalisation remains substantial at ₹2,41,500 crore, placing it firmly in the large-cap segment, yet the low Market Cap Grade of 1 suggests limited upside potential relative to its size and sector peers.

Such a downgrade often prompts increased hedging activity, as evidenced by the surge in put option volumes. Investors appear to be protecting portfolios against further downside or speculating on a decline, particularly given the stock’s recent underperformance relative to the broader Sensex, which returned 0.24% on the same day, and the sector’s 1.12% gain.

Expiry Patterns and Strategic Implications

All the highlighted put options are set to expire on 30 March 2026, providing a clear timeframe for market participants’ expectations. The concentration of open interest near the current price level suggests that traders are closely monitoring the stock’s movement in the coming month. The elevated turnover and open interest at the 250 strike price, in particular, indicate that this level is a critical pivot point for sentiment and potential price support or resistance.

Given the stock’s technical weakness and the bearish positioning in options, investors should be vigilant about downside risks. The put option activity may also reflect institutional hedging strategies, which could amplify volatility as expiry approaches.

Investor Takeaway: Cautious Approach Recommended

For investors tracking Eternal Ltd, the current landscape suggests a cautious approach. The combination of a Sell Mojo Grade, persistent price weakness, and heavy put option activity points to a market expectation of further downside or at least elevated volatility in the near term. Those holding long positions may consider protective hedging strategies, while prospective buyers might await signs of technical stabilisation or a rating upgrade before committing fresh capital.

Meanwhile, traders focused on options markets can monitor open interest and volume trends closely as the 30 March expiry approaches, using these signals to gauge shifts in sentiment and potential price inflection points.

Overall, Eternal Ltd’s derivatives activity provides a valuable window into market psychology, underscoring the importance of integrating options data into comprehensive investment analysis.

Sector and Market Context

The E-Retail and E-Commerce sector continues to face headwinds amid evolving consumer behaviour and competitive pressures. Eternal Ltd’s underperformance relative to its sector peers and the broader Sensex reflects these challenges. Investors should consider sector dynamics alongside company-specific factors when evaluating Eternal Ltd’s outlook.

Given the stock’s liquidity and sizeable market cap, it remains a key bellwether within its industry, making its options market activity a useful barometer for broader sector sentiment.

Summary of Key Metrics

• Current stock price: ₹250.20
• Most active put strike: ₹250 (3,212 contracts, ₹750.09 lakhs turnover, 2,699 open interest)
• Other active strikes: ₹255, ₹245, ₹240
• Mojo Score: 31.0 (Sell, downgraded from Hold on 23 Oct 2025)
• Market cap: ₹2,41,500 crore (Large Cap)
• Recent price trend: 8-day consecutive fall, -12.84% return
• Delivery volume spike: 7.31 crore shares on 25 Feb 2026 (+231.65% vs 5-day average)
• Trading liquidity: Supports trade sizes up to ₹28.5 crore

Investors should weigh these factors carefully as they navigate the evolving risk-reward profile of Eternal Ltd in the coming weeks.

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