Put Option Activity Highlights
On 28 January 2026, Hindustan Zinc Ltd recorded the highest volume of put option contracts traded among its peers, with 3,389 contracts changing hands at the ₹700 strike price expiring on 24 February 2026. The turnover for these contracts was substantial, amounting to approximately ₹1563.88 lakhs, while open interest stood at 2,670 contracts. This level of activity indicates a significant build-up of bearish bets or protective hedges by market participants.
The underlying stock closed at ₹712.90, just 2.42% shy of its 52-week high of ₹733, yet it underperformed its sector by 2.06% on the day. The stock opened with a gap down of 2.09% and touched an intraday low of ₹705.10, marking a 3.04% decline from the previous close. Despite this, Hindustan Zinc continues to trade above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, suggesting that the medium to long-term trend remains intact.
Market Context and Price Dynamics
Hindustan Zinc Ltd operates within the Non-Ferrous Metals industry, a sector that has experienced mixed performance amid fluctuating commodity prices and global demand uncertainties. The stock’s market capitalisation stands at a robust ₹3,01,117.36 crores, categorising it as a large-cap entity with a strong presence in its segment.
On 27 January 2026, delivery volume surged to 94.66 lakhs shares, a 22.86% increase over the five-day average, indicating rising investor participation. Liquidity remains healthy, with the stock capable of supporting trade sizes up to ₹47.81 crores based on 2% of the five-day average traded value. This liquidity profile supports active options trading and facilitates efficient price discovery.
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Investor Sentiment and Hedging Implications
The surge in put option volumes at the ₹700 strike price, which is slightly below the current market price, suggests that investors are either positioning for a potential downside or seeking to hedge existing long exposures. The open interest of 2,670 contracts further confirms that these positions are not merely speculative but represent a meaningful commitment to downside protection.
Given the stock’s recent two-day rally followed by a reversal and gap down opening, market participants appear cautious about near-term price sustainability. The put option activity could be interpreted as a defensive measure against volatility or a strategic bet anticipating a correction.
Mojo Score Upgrade and Analyst Outlook
Hindustan Zinc Ltd’s Mojo Score currently stands at 71.0, reflecting a positive outlook with a Buy grade. This represents an upgrade from the previous Hold rating, effective from 9 October 2025. The company’s market cap grade is 1, indicating its status as a large-cap stock with strong fundamentals. Despite the recent price dip of 2.42% on the day, the upgraded rating underscores confidence in the company’s medium to long-term prospects within the non-ferrous metals sector.
Sector and Benchmark Comparison
While Hindustan Zinc underperformed its sector by 2.06% on the day, the broader Sensex index gained 0.52%, highlighting a divergence between the stock and the overall market trend. The sector’s modest decline of 0.26% suggests that the stock’s weakness is more company-specific or related to stock-specific technical factors rather than a broad sector sell-off.
Investors should note that the stock remains close to its 52-week high, which may act as a resistance level. The put option activity near the ₹700 strike price could be a reflection of traders anticipating a pullback from this resistance zone.
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Expiry Patterns and Strategic Considerations
The 24 February 2026 expiry date for the active put options is less than a month away, which often leads to increased volatility as traders adjust positions ahead of expiry. The concentration of put contracts at the ₹700 strike price suggests a key psychological and technical level for market participants.
Traders and investors should monitor open interest changes and price action closely in the coming weeks. A sustained move below ₹700 could trigger further downside momentum, while a rebound above this level may alleviate bearish pressures and reduce the need for protective puts.
Conclusion: Balancing Caution with Opportunity
Hindustan Zinc Ltd’s elevated put option activity highlights a cautious stance among investors despite the stock’s strong fundamentals and recent rating upgrade. The interplay between technical resistance near ₹700 and the broader market environment suggests a period of consolidation or correction may be underway.
For investors, this environment calls for a balanced approach—recognising the potential for near-term volatility while appreciating the company’s underlying strength and sector positioning. The stock’s liquidity and active options market provide ample opportunities for strategic hedging and tactical trades.
As always, staying informed with comprehensive research and market insights will be crucial to navigating the evolving landscape of Hindustan Zinc Ltd and the non-ferrous metals sector.
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