Eternal Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity Highlights

On the derivatives front, Eternal's put options with a strike price of ₹280 have emerged as the most actively traded contracts. A total of 2,665 contracts exchanged hands, generating a turnover of approximately ₹15.77 crores. The open interest for these puts stands at 1,840 contracts, indicating sustained investor interest and positioning ahead of the expiry date.

The underlying stock price of Eternal was recorded at ₹283.25, slightly above the ₹280 strike price, suggesting that traders are positioning for a potential downside or seeking protection against near-term declines. The concentration of activity at this strike price and expiry date underscores a strategic focus on managing risk or capitalising on anticipated volatility.

Stock Performance and Market Context

On 26 December 2025, Eternal's stock price showed a decline of 0.67%, underperforming its sector benchmark by 0.56%. The E-Retail/E-Commerce sector itself registered a modest fall of 0.35%, while the broader Sensex index declined by 0.19%. This relative underperformance may be contributing to the increased put option interest as market participants seek downside protection.

Technical indicators reveal a mixed picture. Eternal's price remains above its 200-day moving average, a long-term support level, yet it trades below its shorter-term averages including the 5-day, 20-day, 50-day, and 100-day moving averages. This divergence suggests recent weakness amid a longer-term uptrend, which may be prompting cautious positioning through options.

Investor participation has shown signs of moderation. Delivery volume on 24 December was 79.78 lakh shares, representing a decline of 26.28% compared to the five-day average delivery volume. Despite this, liquidity remains adequate, with the stock supporting trade sizes up to ₹8.69 crores based on 2% of the five-day average traded value, ensuring that option and equity trades can be executed without significant market impact.

Investor Sentiment and Hedging Implications

The concentration of put option activity at the ₹280 strike price, just below the current market price, suggests that investors are either hedging existing long positions or speculating on a near-term price correction. Put options serve as a form of insurance, allowing holders to limit downside risk if the stock price falls below the strike price by expiry.

Given the expiry date of 30 December 2025, the timing aligns with the end of the calendar year, a period often marked by portfolio rebalancing and risk management. The open interest of 1,840 contracts further indicates that these positions are not merely speculative but may represent deliberate hedging strategies by institutional or retail investors.

Such activity can also reflect broader market caution within the E-Retail and E-Commerce sector, which has faced headwinds from evolving consumer behaviour and competitive pressures. Eternal's large market capitalisation of ₹2,73,346.18 crores places it among the sector's heavyweight stocks, making its options activity a bellwether for investor sentiment in this space.

Technical and Fundamental Considerations

While the stock's position above the 200-day moving average suggests underlying long-term support, the recent trading below shorter-term averages points to near-term challenges. The decline in delivery volume may indicate reduced conviction among buyers, potentially increasing volatility around the expiry date.

Liquidity metrics confirm that Eternal remains a viable candidate for active trading strategies, including options. The ability to transact sizeable volumes without significant price disruption is crucial for investors employing hedging or speculative tactics in the derivatives market.

Outlook and Investor Takeaways

As the 30 December expiry approaches, market participants will closely monitor Eternal's price action and options market dynamics. The significant put option volume at the ₹280 strike price highlights a cautious or defensive stance, reflecting concerns about potential downside or volatility in the near term.

Investors should consider the interplay of technical signals, liquidity conditions, and sector trends when evaluating their positions. The stock's large-cap status and liquidity profile support active trading and hedging strategies, but the recent underperformance relative to sector and benchmark indices warrants careful analysis.

Ultimately, the options market activity provides valuable insight into investor sentiment and risk management approaches, serving as a useful barometer for those tracking Eternal and the broader E-Retail/E-Commerce sector.

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