Hindustan Unilever Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity Concentrated Near Current Market Levels

Data from the derivatives segment shows that Hindustan Unilever Ltd (HINDUNILVR) has attracted significant put option volumes with expiry set for 30 December 2025. The underlying stock closed at ₹2,431.4, while the most actively traded put options clustered around strike prices ranging from ₹2,360 to ₹2,460. This range encompasses levels both below and slightly above the current market price, indicating a spectrum of bearish hedging and speculative positioning.

Among these, the ₹2,440 strike price recorded the highest number of contracts traded at 5,151, generating a turnover of ₹333.01 lakhs and an open interest of 1,554 contracts. Close behind, the ₹2,420 strike saw 4,997 contracts traded with a turnover of ₹210.62 lakhs and open interest of 1,460. The ₹2,460 strike also featured prominently with 3,594 contracts and a turnover exceeding ₹344 lakhs, supported by an open interest of 1,265 contracts.

Lower strike prices such as ₹2,380 and ₹2,360 also showed substantial activity, with 3,283 and 2,558 contracts traded respectively, and combined turnover surpassing ₹73 lakhs. Open interest at these levels remained above 1,000 contracts, underscoring sustained investor interest in downside protection or bearish bets.

Stock Performance and Market Context

On the trading day preceding the expiry week, Hindustan Unilever’s stock price underperformed its FMCG sector peers by 1.46%, closing with a 1.10% decline. The stock touched an intraday low of ₹2,403.1, representing a 3.01% dip from recent levels. Weighted average prices indicated that a larger volume of trades occurred nearer to the day’s low, suggesting selling pressure during the session.

Technical indicators reveal that the stock remains above its 200-day moving average, a long-term support level, but trades below its shorter-term moving averages including the 5-day, 20-day, 50-day, and 100-day averages. This mixed technical picture may be contributing to the cautious stance reflected in options activity.

Investor participation has shown a notable rise, with delivery volumes on 2 December reaching 16.71 lakh shares, a 70.3% increase compared to the five-day average. Liquidity remains robust, with the stock’s traded value supporting sizeable transactions up to ₹8.62 crore without significant market impact.

Implications of Put Option Concentration

The concentration of put option contracts at strike prices near the current market value suggests that market participants are positioning for potential downside or seeking protection against adverse price movements. The open interest figures, particularly at ₹2,440 and ₹2,420 strikes, indicate that these levels are focal points for hedging strategies or speculative bearish bets.

Put options serve as a form of insurance for holders of the underlying stock or as a vehicle for traders to capitalise on expected declines. The sizeable turnover and contract volumes in Hindustan Unilever’s put options imply that investors are actively managing risk or expressing caution amid prevailing market conditions.

Given the stock’s large market capitalisation of approximately ₹5,82,088 crore and its standing within the FMCG sector, such options activity is noteworthy. It reflects a nuanced market assessment where investors balance the company’s fundamental strengths against near-term uncertainties.

Expiry Patterns and Investor Behaviour

The December 30 expiry date is a critical juncture for options traders, often prompting increased volumes as positions are adjusted or closed. The observed pattern of heavy put option trading ahead of this expiry aligns with typical market behaviour where investors recalibrate portfolios in response to evolving price dynamics and macroeconomic factors.

Hindustan Unilever’s stock has shown a 1-day return of -2.02%, lagging behind the FMCG sector’s -0.80% and the broader Sensex’s -0.33% on the same day. This relative underperformance may be influencing the elevated put option interest as market participants hedge against further declines or volatility.

Broader Market and Sector Considerations

Hindustan Unilever operates within the fast-moving consumer goods (FMCG) sector, a segment often regarded as defensive due to steady demand patterns. However, the recent trading data suggests that investors are adopting a more cautious stance, possibly reflecting concerns over inflationary pressures, input cost fluctuations, or broader economic uncertainties.

The stock’s liquidity profile supports active trading, with turnover levels sufficient to accommodate sizeable transactions without undue price disruption. This liquidity is a key factor enabling the observed options market activity, as traders can efficiently enter and exit positions.

While the stock remains above its long-term 200-day moving average, the positioning below shorter-term averages may be interpreted as a signal of near-term consolidation or pressure, which could be influencing the put option interest.

Investor Takeaways

For investors and traders, the heavy put option activity in Hindustan Unilever ahead of the December expiry offers insights into market sentiment and risk management practices. The clustering of contracts at strike prices close to the current market value highlights key levels where downside protection is sought.

Those holding the stock may consider the implications of this options activity as part of their portfolio risk assessment, while prospective investors might analyse the underlying factors driving cautious positioning. Monitoring open interest and turnover in these put options can provide valuable clues about evolving market expectations.

Overall, the data underscores the importance of integrating derivatives market signals with fundamental and technical analysis to form a comprehensive view of Hindustan Unilever’s near-term outlook.

Conclusion

Hindustan Unilever’s prominence in put option trading ahead of the 30 December 2025 expiry reflects a complex market environment where investors balance the company’s large-cap stature and sector leadership against emerging risks. The significant volumes and open interest at multiple strike prices near the current stock level indicate active hedging and bearish positioning.

As the expiry date approaches, market participants will closely watch price movements and options data for further indications of sentiment shifts. This activity serves as a reminder of the dynamic interplay between equity and derivatives markets in shaping investment decisions.

Limited Time Only! Upgrade now and get 1 Year of Stock of the week worth Rs. 14,999 for FREE. Don't miss out on this exclusive offer. Claim Your Free Year →