Hindustan Unilever Sees Surge in Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Highlights Bearish Sentiment

On 12 February 2026, Hindustan Unilever emerged as the most active stock in put options, with 10,718 contracts traded at the 2,400 strike price for the 24 February expiry. The turnover for these contracts reached an impressive ₹1,130.86 lakhs, underscoring significant investor interest in downside protection or speculative bearish bets. Open interest currently stands at 2,030 contracts, indicating sustained positioning rather than short-term speculative spikes.

The underlying stock price closed at ₹2,422.0, just above the 2,400 strike, suggesting that traders are positioning for a potential decline or increased volatility in the near term. The 2,400 strike price is a psychologically important level, representing a roughly 0.9% discount to the current market price, which may be viewed as a key support level by market participants.

Price Action and Technical Context

Hindustan Unilever’s stock price has recently underperformed its FMCG sector peers, falling by 2.83% on the day, compared to a sector decline of 0.90% and a Sensex drop of 0.36%. The stock touched an intraday low of ₹2,391.2, marking a 2.91% dip from previous levels. This decline followed four consecutive days of gains, signalling a potential trend reversal or profit booking phase.

Despite the recent weakness, the stock remains above its key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which may provide some technical support. However, falling investor participation, as evidenced by a 2.05% decline in delivery volume to 7.44 lakh shares on 11 February compared to the five-day average, suggests waning conviction among buyers.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹6.29 crores, ensuring that option and stock trades can be executed without significant market impact.

Mojo Score Downgrade Reflects Growing Caution

Hindustan Unilever’s mojo score currently stands at 48.0, categorised as a 'Sell' grade, a downgrade from its previous 'Hold' rating on 3 December 2025. This shift reflects deteriorating fundamentals or market sentiment, signalling that the stock may face headwinds in the near term. The company’s market cap grade remains at 1, indicating its large-cap status with a market capitalisation of ₹5,80,537 crores, but this has not insulated it from recent negative momentum.

Investors should note that the downgrade and increased put option activity may be indicative of hedging strategies by institutional investors or a broader bearish outlook on the FMCG sector, which has seen some pressure due to inflationary concerns and changing consumer spending patterns.

Expiry Patterns and Investor Positioning

The 24 February 2026 expiry is attracting significant attention, with put options at the 2,400 strike dominating volumes. This expiry is less than two weeks away, suggesting that traders are positioning for near-term downside risk or volatility. The open interest data supports the view that these are not merely speculative trades but represent genuine hedging or directional bets.

Given the stock’s recent price action and technical setup, the 2,400 strike price acts as a critical juncture. Should the stock breach this level decisively, it could trigger further downside pressure, potentially validating the bearish sentiment reflected in the options market.

Sector and Market Comparison

While Hindustan Unilever has underperformed the FMCG sector by 0.43% on the day, the broader sector remains relatively resilient. The Sensex’s modest decline of 0.36% contrasts with the sharper fall in HINDUNILVR, highlighting stock-specific factors at play. This divergence may be driven by company-specific news, earnings outlook, or investor repositioning ahead of the expiry.

Investors should also consider the broader macroeconomic environment, including inflation trends, consumer demand shifts, and regulatory developments, which could impact FMCG stocks differently. Hindustan Unilever’s large-cap status and diversified product portfolio provide some cushion, but the current market signals warrant caution.

Investor Implications and Outlook

For investors currently holding Hindustan Unilever shares, the surge in put option activity and the downgrade in mojo grade suggest a cautious stance may be prudent. The stock’s recent underperformance relative to the sector and the broader market, combined with technical signals of a potential trend reversal, indicate that downside risks are elevated in the short term.

Hedging strategies using put options at the 2,400 strike price could provide protection against further declines, especially as the 24 February expiry approaches. Conversely, investors with a bullish long-term view may consider the current weakness as a potential entry point, given the company’s strong market position and resilient fundamentals.

Market participants should closely monitor price action around key support levels and watch for changes in open interest and volume in both the options and cash markets to gauge evolving sentiment.

Conclusion

Hindustan Unilever Ltd is currently navigating a phase of increased bearish positioning as reflected by heavy put option trading at the 2,400 strike price ahead of the 24 February 2026 expiry. The downgrade in mojo grade to 'Sell' and recent price weakness underline growing investor caution. While the stock remains technically supported by its moving averages, falling delivery volumes and sector underperformance suggest that downside risks are not yet fully priced in.

Investors should weigh the benefits of hedging or reassessing their portfolio exposure in light of these developments, keeping a close eye on expiry dynamics and broader market trends.

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