Hindalco Industries Sees Surge in Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 13 February 2026, Hindalco's put options with a strike price of ₹900 emerged as the most actively traded contracts in the market. A total of 10,140 contracts exchanged hands, generating a turnover of approximately ₹1353.59 lakhs. The open interest for these puts stands at 2,799 contracts, signalling sustained interest in downside protection or speculative bearish bets.

The underlying stock price at the time was ₹921.6, placing the ₹900 strike slightly out-of-the-money. This positioning suggests that traders are anticipating a potential decline below this level by the expiry date, or are hedging existing long positions against further downside risk.

Recent Price Performance and Market Context

Hindalco Industries has been on a downward trajectory, losing 5.16% over the past three trading days. On 13 February, the stock opened sharply lower by 4.24% and touched an intraday low of ₹901, marking a 6.57% drop from the previous close. This decline outpaced the Aluminium & Aluminium Products sector, which fell by 4.3%, and was notably steeper than the Sensex’s 0.87% loss on the same day.

Despite the recent weakness, the stock remains above its 50-day, 100-day, and 200-day moving averages, though it trades below the shorter-term 5-day and 20-day averages. This mixed technical picture indicates that while the medium-term trend remains intact, short-term momentum has turned negative.

Investor participation has also waned, with delivery volumes dropping by 22.79% compared to the five-day average, signalling reduced conviction among buyers. Liquidity remains adequate, with the stock capable of handling trade sizes up to ₹9.59 crores based on 2% of the five-day average traded value.

Mojo Score and Analyst Ratings

Hindalco currently holds a Mojo Score of 61.0, categorised as a 'Hold' rating. This marks a downgrade from its previous 'Buy' grade assigned on 18 November 2025. The downgrade reflects the recent deterioration in price momentum and increased bearish sentiment among market participants. The company’s market capitalisation stands at a substantial ₹2,05,104 crores, classifying it as a large-cap stock within the non-ferrous metals industry.

Implications of Put Option Surge

The heavy put option activity at the ₹900 strike price expiring on 24 February 2026 suggests that investors are either hedging against further downside or speculating on a near-term correction. Given the stock’s recent underperformance relative to its sector and the broader market, this positioning is consistent with a cautious outlook.

Put options serve as a protective tool for holders of the underlying shares, allowing them to limit losses if the stock price falls below the strike price. Alternatively, traders may be taking outright bearish positions, anticipating a decline below ₹900 within the next two weeks.

Open interest of 2,799 contracts indicates that this is not merely a one-day spike but a sustained interest in downside protection. The expiry date being just over a week away adds urgency to these positions, as traders seek to capitalise on or guard against near-term volatility.

Sectoral and Broader Market Trends

The Aluminium & Aluminium Products sector has been under pressure, with a 4.3% decline on the day of analysis. Hindalco’s sharper fall of 4.87% and its underperformance relative to the sector by 0.35% highlight company-specific challenges or sentiment factors weighing on the stock.

Broader market indices like the Sensex have shown resilience with a modest 0.87% decline, underscoring that Hindalco’s weakness is more pronounced and possibly driven by sectoral headwinds or company fundamentals.

Investor Takeaways and Outlook

Investors should approach Hindalco with caution in the near term given the evident bearish sentiment and technical weakness. The stock’s failure to hold above short-term moving averages and the surge in put option interest indicate potential for further downside or at least heightened volatility ahead of the 24 February expiry.

However, the stock’s position above longer-term moving averages suggests that the medium-term uptrend is not yet broken, offering some support. Investors with a bullish outlook may consider waiting for confirmation of a reversal or a stabilisation in price action before increasing exposure.

For those holding existing positions, the active put option market provides an opportunity to hedge downside risk effectively. Traders looking to capitalise on volatility may find the current elevated open interest and turnover in puts a fertile ground for short-term strategies.

Overall, Hindalco’s recent price action and options market behaviour reflect a cautious market stance, with participants bracing for potential near-term corrections amid sectoral weakness and broader market uncertainties.

Technical and Fundamental Considerations

From a technical perspective, the stock’s gap down opening and intraday lows near ₹901 highlight strong selling pressure. The divergence between short-term and long-term moving averages warrants close monitoring, as a sustained breach below the 50-day average could trigger further declines.

Fundamentally, Hindalco remains a heavyweight in the non-ferrous metals industry with a large market cap and significant operational scale. However, external factors such as commodity price fluctuations, global demand dynamics, and input cost pressures continue to influence investor sentiment.

Given the downgrade from 'Buy' to 'Hold' by MarketsMOJO on 18 November 2025, investors should weigh the company’s fundamentals against the prevailing technical signals and market conditions before making allocation decisions.

Expiry Patterns and Market Sentiment

The 24 February 2026 expiry is attracting concentrated put option activity, which often precedes increased volatility as traders adjust or close positions. The clustering of open interest around the ₹900 strike price suggests this level will be a key technical pivot in the coming days.

Market participants will be watching closely for price action around this strike, as a breach could trigger further option-related hedging flows and amplify directional moves. Conversely, a rebound above this level may alleviate some bearish pressure and restore confidence.

Conclusion

Hindalco Industries Ltd is currently navigating a challenging phase marked by heightened bearish sentiment and active put option trading. The stock’s recent underperformance relative to its sector and the broader market, combined with technical weakness and increased hedging activity, signals caution for investors.

While the medium-term fundamentals remain intact, near-term volatility is likely to persist as expiry approaches. Investors and traders should monitor option market dynamics closely and consider protective strategies to manage risk effectively.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →