Hindustan Unilever Sees Significant Put Option Activity Ahead of December Expiry

Put Option Trading Highlights

Data from the derivatives market indicates that Hindustan Unilever Ltd (HINDUNILVR) has witnessed substantial put option volumes with expiry set for 30 December 2025. The strike prices attracting the highest put option activity include ₹2300, ₹2440, ₹2460, and ₹2480. Among these, the ₹2460 strike price recorded the largest number of contracts traded at 2,548, accompanied by a turnover of approximately ₹72.01 lakhs and an open interest of 2,591 contracts. Close behind, the ₹2480 strike saw 1,460 contracts traded with a turnover of ₹70.69 lakhs and open interest of 1,289 contracts.

The ₹2440 strike price also attracted significant attention, with 1,730 contracts traded and an open interest of 2,795, while the ₹2300 strike had 1,196 contracts traded but a notably lower turnover of ₹1.26 lakhs and open interest of 2,195 contracts. The underlying stock price at the time stood at ₹2,481.10, placing the majority of these strike prices near or slightly below the current market value, which suggests a strategic positioning by investors either to hedge existing holdings or to speculate on potential downside moves.

Expiry Patterns and Market Implications

The concentration of put option activity around the ₹2440 to ₹2480 strike prices, close to the current underlying value, indicates a nuanced market sentiment. Investors appear to be balancing between protection against moderate declines and speculative bets on price corrections. The open interest figures, particularly at the ₹2440 and ₹2460 strikes, highlight sustained interest and potential resistance levels in the options market.

Such activity often precedes key market events or earnings announcements, as traders seek to manage risk exposure. The December expiry date adds a temporal dimension to this positioning, with market participants likely adjusting their portfolios ahead of year-end considerations and macroeconomic developments.

Stock Performance Context

Hindustan Unilever’s stock performance in recent sessions provides additional context to the options activity. The stock has outperformed its FMCG sector peers by 0.72% today and has recorded gains over the past four consecutive days, delivering a cumulative return of 2.9% during this period. This upward momentum is supported by the stock trading above its 5-day, 20-day, and 200-day moving averages, although it remains below the 50-day and 100-day averages, indicating a mixed technical picture.

Despite this positive price action, investor participation appears to be moderating. Delivery volumes on 28 November stood at 6.97 lakh shares, representing a decline of 53.44% compared to the five-day average delivery volume. This reduction in participation may reflect cautious sentiment or profit-booking by short-term traders.

Liquidity metrics suggest that Hindustan Unilever remains sufficiently liquid for sizeable trades, with a trading capacity of approximately ₹9.68 crore based on 2% of the five-day average traded value. This liquidity supports active options trading and facilitates efficient price discovery in both the cash and derivatives markets.

Bearish Positioning and Hedging Strategies

The prominence of put options at strike prices near the current market value suggests that investors are either hedging long positions or positioning for potential downside risks. Put options serve as insurance against price declines, and the elevated open interest at these strikes indicates that market participants are actively managing risk exposure.

Given Hindustan Unilever’s status as a large-cap FMCG stock with a market capitalisation of approximately ₹5,82,557.66 crore, such hedging activity is not uncommon. Institutional investors and portfolio managers often use options to protect gains or limit losses in volatile market conditions. The presence of significant turnover and open interest in put options also points to speculative interest, with traders possibly anticipating corrections or sector-specific headwinds.

Comparative Sector and Market Performance

On the day in question, Hindustan Unilever’s stock recorded a 0.52% return, outperforming the FMCG sector’s modest 0.04% gain and the broader Sensex index’s 0.32% rise. This relative strength contrasts with the cautious tone implied by the options market, highlighting a divergence between cash market optimism and derivatives market caution.

Such divergence can arise from differing time horizons or risk appetites among market participants. While the cash market reflects immediate buying interest, the options market may be pricing in potential volatility or downside scenarios over the coming weeks.

Outlook and Investor Considerations

Investors analysing Hindustan Unilever’s options activity should consider the interplay between the stock’s recent price gains and the notable put option interest. The concentration of put contracts near the current price level may indicate a cautious stance, with market participants seeking to mitigate risks amid uncertain macroeconomic conditions or sector-specific challenges.

Moreover, the mixed technical signals from moving averages and the decline in delivery volumes suggest that while the stock has momentum, underlying investor conviction may be tentative. This environment often leads to increased volatility, which is reflected in the active options trading.

For portfolio managers and traders, monitoring changes in open interest and turnover in these put options can provide valuable insights into evolving market sentiment and potential price support or resistance zones ahead of the December expiry.

Conclusion

Hindustan Unilever Ltd’s derivatives market activity reveals a complex picture of investor positioning as the December 2025 expiry approaches. The heavy put option volumes at strike prices close to the current market value underscore a blend of hedging and speculative strategies, reflecting cautious sentiment despite recent stock gains. Market participants should remain attentive to these dynamics as they navigate the evolving risk landscape in the FMCG sector.

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