Hindalco Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Highlights Bearish Outlook

On 1 February 2026, Hindalco’s put options with a strike price of ₹900 and expiry date 24 February 2026 emerged as the most actively traded contracts in the segment. A total of 7,285 contracts changed hands, generating a turnover of approximately ₹1,909.25 lakhs. The open interest for these puts stands at 1,948 contracts, indicating sustained investor interest in downside protection or speculative bearish bets.

The underlying stock price at the time was ₹924.45, placing the ₹900 strike slightly out-of-the-money. This positioning often reflects a strategic choice by traders to hedge against a moderate decline or to capitalise on expected volatility in the near term.

Price Action and Market Context

Hindalco’s stock has been under pressure, recording a consecutive two-day decline with a cumulative loss of 9.54%. On the day of the report, the stock opened sharply lower by 4.43%, touching an intraday low of ₹866.35, which represents a 10% drop from the previous close. The weighted average traded price skewed towards the lower end of the day’s range, underscoring selling dominance.

Despite this weakness, the stock remains above its 50-day, 100-day, and 200-day moving averages, though it trades below the short-term 5-day and 20-day averages. This technical setup suggests a potential short-term correction within a longer-term uptrend, a nuance that may be driving the increased put option interest as investors seek to hedge or speculate on further near-term declines.

Sector-wise, the Aluminium & Aluminium Products segment has also experienced a downturn, falling 5.13% on the day, indicating broader headwinds impacting Hindalco’s performance. However, Hindalco marginally outperformed its sector by 0.82%, reflecting relative resilience amid sector weakness.

Investor Participation and Liquidity Considerations

Investor engagement remains robust, with delivery volumes rising to 59.97 lakh shares on 30 January, a 1.41% increase over the five-day average. This uptick in delivery volume suggests that despite recent price falls, investors continue to hold or accumulate shares, possibly anticipating a rebound or valuing the stock’s long-term fundamentals.

Liquidity metrics affirm that Hindalco is sufficiently liquid to support sizeable trades, with the stock’s daily traded value comfortably accommodating transactions up to ₹22.5 crore based on 2% of the five-day average traded value. This liquidity facilitates active options trading and allows institutional players to implement complex hedging strategies efficiently.

Mojo Score and Rating Dynamics

Hindalco Industries currently holds a Mojo Score of 75.0, categorised as a Buy rating. This represents a slight downgrade from its previous Strong Buy grade, which was adjusted on 18 November 2025. The downgrade reflects recent price volatility and sector headwinds, though the stock’s large market capitalisation of ₹2,05,453 crore and strong fundamentals continue to underpin its investment appeal.

The company’s Market Cap Grade is rated 1, indicating its status as a large-cap stock with significant institutional interest and market influence. This stature often attracts sophisticated investors who utilise options markets to hedge exposure or express directional views.

Expiry Patterns and Strike Price Significance

The concentration of put option activity at the ₹900 strike price expiring on 24 February 2026 is particularly noteworthy. This expiry is the nearest monthly cycle, making it a focal point for traders positioning themselves ahead of potential earnings announcements, macroeconomic data releases, or sector-specific developments.

Given the stock’s current price near ₹924, the ₹900 strike acts as a psychological support level. Heavy put buying here may indicate expectations of a test or breach of this level, or alternatively, a desire to protect long stock positions against downside risk in the short term.

Broader Market and Sector Implications

While Hindalco’s stock has underperformed the Sensex, which gained 0.19% on the day, it has outperformed its sector, which declined 5.31%. This relative strength amidst sector weakness suggests that investors may view Hindalco as a better-quality play within the Non-Ferrous Metals space, despite the recent pullback.

The aluminium sector’s challenges, including fluctuating commodity prices and global demand uncertainties, continue to weigh on sentiment. However, Hindalco’s diversified operations and scale provide some cushion against volatility, which may explain the mixed signals from price action and options market activity.

Investor Takeaways and Strategic Considerations

For investors, the surge in put option volumes at the ₹900 strike price signals caution. Those holding Hindalco shares may consider protective strategies such as buying puts to hedge against further downside risk, especially given the recent sharp declines and technical weakness in the short term.

Conversely, speculative traders might view the elevated put activity as an opportunity to sell premium or initiate bearish positions, anticipating continued volatility or a deeper correction. The stock’s liquidity and active options market facilitate such strategies.

Long-term investors should weigh the recent price weakness against Hindalco’s strong fundamentals, large market cap, and sector positioning. The downgrade from Strong Buy to Buy by MarketsMOJO reflects a tempered outlook but does not diminish the company’s core strengths.

Monitoring the stock’s price action around the ₹900 level and the evolution of open interest in puts and calls will be crucial in gauging market sentiment and potential directional shifts in the coming weeks.

Conclusion

Hindalco Industries Ltd’s recent spike in put option trading highlights a growing bearish or hedging stance among market participants amid a backdrop of price weakness and sector challenges. The concentration of activity at the ₹900 strike expiring in February underscores investor focus on near-term downside risk management. While the stock remains fundamentally sound with a Buy rating and strong market cap credentials, short-term volatility and technical pressures warrant cautious positioning. Investors should closely monitor options market trends alongside price movements to navigate the evolving risk landscape effectively.

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