HCL Technologies Sees Surge in Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

On 13 February 2026, HCL Technologies (NSE: HCLTECH) emerged as the most active stock in put options, with 4,517 contracts traded at the ₹1,400 strike price expiring on 24 February 2026. The turnover for these contracts reached ₹537.05 lakhs, reflecting substantial investor interest in downside protection or speculative bearish bets. Open interest currently stands at 2,204 contracts, indicating that a sizeable number of positions remain open and could influence price action as expiry approaches.

The underlying stock price was ₹1,417.10 at the time of this activity, just above the ₹1,400 strike, which is a critical technical level. This proximity suggests that traders are positioning for a potential decline below this level, which would render these puts in-the-money and profitable for holders.

Price Performance and Technical Context

HCL Technologies has been under pressure in recent sessions, with the stock falling for four consecutive days, resulting in an 11.76% decline over this period. On 13 February, the stock opened with a gap down of 3.6% and touched an intraday low of ₹1,396, down 5.43% from the previous close. This weakness contrasts with the broader IT software sector, which declined by 4.41%, and the Sensex, which was down 0.98% on the same day.

Technically, HCL Technologies is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a bearish trend. The stock’s relative underperformance and technical breakdown have likely contributed to the surge in put buying as investors seek downside protection or speculate on further declines.

Investor Participation and Liquidity

Investor participation has notably increased, with delivery volumes rising to 36.68 lakh shares on 12 February, an 81.03% increase compared to the five-day average. This heightened activity suggests that market participants are actively adjusting their positions amid the recent volatility. The stock’s liquidity remains robust, with a trade size capacity of approximately ₹11.29 crore based on 2% of the five-day average traded value, facilitating efficient execution of large trades.

Fundamental and Market Positioning

HCL Technologies operates in the Computers - Software & Consulting industry and is classified as a large-cap stock with a market capitalisation of ₹4,00,564 crore. Despite recent price weakness, the company maintains a high dividend yield of 3.66%, which may provide some income cushion for investors amid volatility.

However, the company’s Mojo Score has declined to 62.0, with a current Mojo Grade of Hold, downgraded from Buy on 9 February 2026. This downgrade reflects a more cautious outlook based on recent performance and market conditions. The Market Cap Grade remains at 1, indicating strong market capitalisation but tempered by the recent negative momentum.

Bearish Positioning and Hedging Implications

The concentration of put option activity at the ₹1,400 strike price, just below the current market price, suggests that investors are either hedging existing long positions or speculating on a further decline. The open interest of 2,204 contracts indicates that these positions are not merely short-term trades but represent a meaningful commitment to downside protection.

Given the stock’s recent underperformance relative to the sector and the broader market, this put buying could be interpreted as a signal of investor caution. The expiry date of 24 February 2026 is also significant, as traders may be positioning ahead of potential earnings announcements or macroeconomic events that could impact the IT sector.

Sectoral and Broader Market Context

The IT - Software sector has been under pressure, falling 4.41% on the day of the put option surge. HCL Technologies’ outperformance relative to the sector by 0.4% on the same day is marginal and overshadowed by its four-day losing streak. This suggests that while the stock is slightly more resilient than peers in the short term, the overall sector weakness is weighing heavily on investor sentiment.

Investors should also consider the broader market environment, where the Sensex declined by 0.98%, indicating a more moderate market correction compared to the sharper declines in IT stocks. This divergence highlights sector-specific challenges, including concerns over global IT spending and currency fluctuations, which may be driving the bearish positioning in HCL Technologies.

Investor Takeaways and Outlook

For investors in HCL Technologies, the surge in put option activity and the stock’s technical weakness warrant a cautious approach. The current trading below all key moving averages and the downgrade to a Hold rating suggest that further downside risk cannot be ruled out in the near term.

However, the company’s strong market capitalisation, high dividend yield, and relative resilience compared to the sector may offer some support. Investors looking to hedge their exposure or speculate on a correction have found attractive strike prices near ₹1,400, with expiry just over a week away, providing a clear timeframe for risk management.

Market participants should monitor open interest trends and price action closely as the 24 February expiry approaches, as these will provide further clues on the prevailing sentiment and potential price direction.

Conclusion

HCL Technologies is currently navigating a challenging phase marked by increased bearish positioning through put options and technical weakness. While the stock remains a significant player in the IT software sector, investors are advised to weigh the risks carefully and consider hedging strategies or alternative investments as indicated by comprehensive multi-parameter analyses.

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