Eternal Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment

Surge in Put Option Volume and Open Interest

On 10 February 2026, Eternal Ltd’s put options with a strike price of ₹280 emerged as the most actively traded contracts in the market. A total of 5,117 contracts exchanged hands, generating a turnover of approximately ₹280.44 lakhs. The open interest for these puts stands at 2,594 contracts, indicating sustained interest and potential build-up of bearish bets or protective hedges.

The underlying stock price at the time was ₹303.95, comfortably above the ₹280 strike, suggesting that traders are positioning for a possible downside or seeking insurance against a correction. This activity is notable given the stock’s recent upward momentum, which has seen it outperform its sector by 4.29% on the day and deliver a 7.12% return over the past two days.

Price and Technical Context

Eternal Ltd’s stock price touched an intraday high of ₹304.25, marking a 5.33% gain on the day. The weighted average price of traded shares skewed closer to the day’s low, hinting at some selling pressure despite the overall positive price movement. The stock trades above its 5-day, 20-day, 50-day, and 200-day moving averages, but remains below the 100-day moving average, reflecting a mixed technical picture.

Investor participation appears to be waning, with delivery volumes on 9 February falling by 60.07% compared to the five-day average, signalling cautious sentiment among long-term holders. Liquidity remains adequate, with the stock’s traded value supporting sizeable trade sizes up to ₹26.33 crores, ensuring that option and stock trades can be executed without significant market impact.

Fundamental and Market Positioning

Despite the recent price gains, Eternal Ltd’s fundamental outlook remains under scrutiny. The company holds a Mojo Score of 37.0 and a Mojo Grade of Sell, downgraded from Hold on 23 October 2025. This downgrade reflects concerns over the company’s growth prospects or valuation metrics within the highly competitive E-Retail and E-Commerce sector. The market capitalisation stands at a substantial ₹2,93,660.17 crores, classifying it as a large-cap stock, yet the low Market Cap Grade of 1 suggests limited upside potential relative to peers.

Bearish Positioning Despite Recent Gains

The heavy put option activity at the ₹280 strike price, expiring on 24 February 2026, suggests that market participants are either hedging existing long positions or speculating on a near-term price correction. This is particularly noteworthy given Eternal Ltd’s recent two-day rally of over 7%, which outpaces both the sector’s 0.85% and the Sensex’s 0.33% gains on the same day.

Put options serve as a protective tool for investors wary of downside risk, and the elevated open interest indicates that these positions are not merely speculative but may represent a strategic defensive stance. The strike price is approximately 7.8% below the current market price, signalling expectations of a potential pullback or increased volatility in the coming weeks.

Expiry Patterns and Market Implications

The 24 February expiry is just two weeks away, a period often marked by heightened option activity as traders adjust their portfolios ahead of contract settlements. The concentration of put contracts at a single strike price points to a consensus level of support or a target for downside protection. Should the stock price approach or breach ₹280, these put holders stand to benefit, potentially triggering further selling pressure.

Conversely, if Eternal Ltd maintains its current momentum and remains above the strike, the puts may expire worthless, resulting in losses for bearish speculators but gains for the underlying stock holders. This dynamic underscores the delicate balance between optimism and caution prevailing among market participants.

Comparative Sector and Market Analysis

Within the E-Retail and E-Commerce sector, Eternal Ltd’s recent outperformance contrasts with the broader market’s modest gains. However, the downgrade to a Sell rating by MarketsMOJO and the low Mojo Score highlight underlying concerns that may temper investor enthusiasm. The stock’s liquidity and large market capitalisation make it a favoured instrument for institutional hedging, which could explain the pronounced put option volumes.

Investors should weigh the technical signals and option market sentiment alongside fundamental assessments to gauge the stock’s near-term trajectory. The mixed moving average signals and falling delivery volumes suggest caution, while the strong recent price gains indicate resilience.

Investor Takeaways and Outlook

For investors and traders, the current option market activity in Eternal Ltd offers valuable insights. The surge in put option volume and open interest at a strike price notably below the current market level signals a cautious stance, possibly reflecting concerns about valuation or sector headwinds. This bearish positioning may also serve as a hedge against broader market volatility or company-specific risks.

Given the stock’s recent gains and mixed technical indicators, market participants should monitor price action closely as the 24 February expiry approaches. A breach of the ₹280 level could trigger accelerated downside moves, while sustained strength above this mark may invalidate bearish bets and support further upside.

Ultimately, the interplay between option market sentiment and fundamental assessments will be crucial in shaping Eternal Ltd’s near-term performance. Investors are advised to consider both dimensions carefully when making portfolio decisions.

Summary of Key Metrics

Eternal Ltd’s put option activity highlights the following:

• Strike Price: ₹280
• Expiry Date: 24 February 2026
• Number of Contracts Traded: 5,117
• Turnover: ₹280.44 lakhs
• Open Interest: 2,594 contracts
• Underlying Stock Price: ₹303.95
• Mojo Score: 37.0 (Sell rating)
• Market Cap: ₹2,93,660.17 crores (Large Cap)

These figures underscore the significant hedging and speculative activity shaping the stock’s current market dynamics.

Conclusion

Eternal Ltd’s pronounced put option trading ahead of the February expiry reflects a nuanced market outlook, blending recent price strength with cautious positioning. While the stock has outperformed its sector and broader indices recently, the option market reveals underlying concerns that investors should not overlook. Careful monitoring of price levels, option open interest, and fundamental developments will be essential for navigating the stock’s near-term prospects.

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