Eternal Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights Growing Caution

On 9 January 2026, Eternal Ltd (stock code: 1003511) emerged as the most active stock in put options trading, with 2,485 contracts changing hands for the 27 January 2026 expiry. The strike price attracting the highest volume was ₹280, slightly below the current underlying value of ₹292.20. This activity generated a turnover of approximately ₹27.42 crores, reflecting significant investor interest in downside protection or speculative bearish bets.

Open interest in these put options stands at 2,780 contracts, indicating that a substantial number of positions remain open, which could influence price movements as expiry approaches. The concentration of activity at the ₹280 strike suggests that market participants are positioning for a potential correction or increased volatility in the near term.

Stock Performance and Market Context

Despite the surge in put option activity, Eternal Ltd’s stock price has demonstrated resilience. The share price has gained 2.98% on the day, outperforming its sector by 2.39% and the broader Sensex, which declined by 0.19%. Over the past three consecutive trading sessions, the stock has delivered a cumulative return of 4.14%, supported by rising investor participation and a 31.69% increase in delivery volume compared to the five-day average.

Technically, the stock is trading above its 5-day, 20-day, and 200-day moving averages, signalling short- and long-term strength. However, it remains below the 50-day and 100-day moving averages, suggesting some resistance at intermediate levels. Liquidity remains robust, with an average traded value sufficient to support trade sizes of up to ₹17.09 crores, ensuring smooth execution for institutional and retail investors alike.

Mojo Score and Analyst Sentiment

MarketsMOJO assigns Eternal Ltd a Mojo Score of 37.0, categorising it as a 'Sell' with a recent downgrade from 'Hold' on 23 October 2025. The market cap grade is rated at 1, reflecting its status as a large-cap stock with a market capitalisation of ₹2,81,307.72 crores. This downgrade aligns with the increased put option activity, signalling growing caution among analysts and investors alike.

Expiry Patterns and Investor Behaviour

The expiry date of 27 January 2026 is attracting significant attention, with put options at the ₹280 strike price dominating volumes. This strike is approximately 4.3% below the current market price, indicating that investors are hedging against a moderate downside move or speculating on a near-term decline. The open interest build-up suggests that these positions are not merely short-term trades but part of a broader strategy to manage risk or capitalise on expected volatility.

Such activity often precedes periods of heightened market uncertainty or sector-specific challenges. Given Eternal Ltd’s exposure to the competitive E-Retail and E-Commerce industry, factors such as changing consumer behaviour, regulatory developments, or macroeconomic pressures could be influencing investor sentiment.

Bearish Positioning Versus Stock Fundamentals

While the put option surge points to bearish sentiment, the underlying stock fundamentals and recent price action present a more nuanced picture. The stock’s outperformance relative to its sector and the Sensex, combined with strong delivery volumes, suggests that some investors remain confident in Eternal Ltd’s medium-term prospects.

However, the downgrade in Mojo Grade from Hold to Sell and the relatively low Mojo Score reflect concerns about valuation, growth prospects, or competitive pressures. Investors may be using put options as a hedge against these risks, balancing optimism with caution.

Comparative Sector Analysis

Within the E-Retail and E-Commerce sector, Eternal Ltd’s put option activity stands out compared to peers, many of which have seen more muted derivatives volumes. This divergence may indicate company-specific factors driving hedging demand, such as recent earnings reports, guidance revisions, or strategic announcements.

Sector returns have been modest, with a 0.30% gain on the day, lagging Eternal Ltd’s 2.80% rise. This relative strength amid bearish derivatives positioning highlights the complexity of market dynamics, where short-term hedging coexists with longer-term bullish views.

Implications for Investors and Traders

For investors, the heightened put option activity in Eternal Ltd serves as a cautionary signal. While the stock’s recent gains and technical positioning remain positive, the increased hedging suggests that market participants are bracing for potential volatility or downside risk in the near term.

Traders may find opportunities in this environment by monitoring open interest changes and strike price concentrations to gauge market sentiment shifts. The ₹280 strike price put options, with their significant volume and open interest, could act as a key level to watch for price support or resistance as expiry approaches.

Moreover, the divergence between the stock’s price strength and bearish derivatives positioning underscores the importance of a balanced approach, combining fundamental analysis with options market insights to inform trading and investment decisions.

Outlook and Conclusion

In summary, Eternal Ltd’s surge in put option trading ahead of the 27 January expiry highlights a growing bearish undercurrent despite the stock’s recent positive momentum. The combination of a Mojo Grade downgrade, concentrated put option volumes at the ₹280 strike, and rising open interest points to increased hedging and cautious positioning among investors.

Market participants should closely monitor developments in the E-Retail and E-Commerce sector, company-specific news, and technical indicators to assess whether this bearish sentiment will translate into a price correction or remain a temporary risk management measure. Given the stock’s liquidity and active derivatives market, Eternal Ltd remains a focal point for traders seeking to capitalise on volatility and directional shifts in the coming weeks.

Key Data Summary:

• Underlying stock price: ₹292.20


• Put option strike price with highest activity: ₹280


• Number of put contracts traded: 2,485


• Turnover in put options: ₹27.42 crores


• Open interest in put options: 2,780 contracts


• Mojo Score: 37.0 (Sell, downgraded from Hold on 23 Oct 2025)


• Market cap: ₹2,81,307.72 crores (Large Cap)


• Stock 1-day return: 2.80%


• Sector 1-day return: 0.30%


• Sensex 1-day return: -0.19%

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