Hindustan Zinc Sees Heavy Put Option Activity Amid Bullish Price Momentum

Robust Price Performance Contrasts with Elevated Put Activity

Hindustan Zinc Ltd, a heavyweight in the non-ferrous metals sector with a market capitalisation of ₹2,73,589 crores, has been on a strong upward trajectory. The stock hit a new 52-week high of ₹669.75 on 14 January 2026, marking a 6.33% intraday gain and outperforming its sector by 0.31%. Over the past four consecutive trading sessions, the share price has surged by 12.68%, reflecting sustained buying interest and positive market sentiment.

Technical indicators reinforce this bullish momentum, with the stock trading comfortably above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. The metal sector itself has gained 5.44% on the day, further buoying Hindustan Zinc’s performance. However, delivery volumes have declined sharply by 48.19% compared to the five-day average, suggesting a possible reduction in long-term investor participation despite the price rally.

Put Option Activity Highlights Bearish Hedging and Speculation

Contrasting the bullish price action, the options market reveals a significant surge in put option contracts for Hindustan Zinc. The 600 strike price put options expiring on 27 January 2026 saw 3,918 contracts traded, generating a turnover of ₹195.34 lakhs and an open interest of 2,291 contracts. This level of activity is notable given the underlying stock price of ₹668, indicating that investors are either hedging against a potential pullback or positioning for a correction below the 600 level.

Put options are typically used to protect long stock positions or to speculate on declines. The heavy volume and open interest at the 600 strike suggest a concentration of bearish bets or protective hedges clustered around this psychologically significant strike price, which is approximately 10.4% below the current market price. This divergence between strong price gains and elevated put activity may reflect cautious sentiment amid broader market uncertainties or sector-specific risks such as commodity price volatility or regulatory developments.

Mojo Score Upgrade Reflects Improving Fundamentals

Hindustan Zinc’s recent upgrade from a Sell to a Hold rating by MarketsMOJO on 9 October 2025, with a Mojo Score of 65.0, indicates improving fundamentals and a more balanced risk-reward profile. The company’s market cap grade remains at 1, denoting its large-cap status and liquidity. The stock’s 5.37% day change on 14 January 2026 further underscores its strong momentum relative to the broader market, where the Sensex declined marginally by 0.09%.

Despite the upgrade, the Hold rating suggests that while the stock has stabilised and improved, it may not yet warrant a full Buy recommendation, possibly due to valuation concerns or sector headwinds. This nuanced stance aligns with the mixed signals from the options market, where put buying indicates some investor caution.

Expiry Patterns and Investor Behaviour

The expiry date of 27 January 2026 is approaching rapidly, and the concentration of put option activity at the 600 strike price may influence price dynamics in the coming days. Open interest of 2,291 contracts at this strike is significant, implying that a sizeable number of investors have positions that could be exercised or closed out near expiry. This can lead to increased volatility as traders adjust their hedges or speculative bets.

Moreover, the weighted average price of traded options skewing closer to the low price suggests that sellers of these puts may be accepting lower premiums, possibly reflecting a view that downside risk is limited or that the stock will remain above the strike price. However, the sheer volume of put contracts indicates that risk management remains a priority for many market participants.

Sector Context and Comparative Performance

The non-ferrous metals sector has been a strong performer recently, with Hindustan Zinc’s gains outpacing the sector average. This sectoral strength is driven by robust demand for zinc and related metals, supply constraints, and favourable global commodity prices. However, the sector is also exposed to cyclical risks, geopolitical tensions, and environmental regulations that could impact earnings visibility.

Investors should weigh these factors carefully, especially given the mixed signals from price action and options market positioning. The current scenario suggests a market that is optimistic but hedging against potential volatility or profit-taking in the near term.

Investor Takeaways and Outlook

For investors in Hindustan Zinc Ltd, the current environment presents a complex picture. The stock’s strong price performance and technical strength are encouraging, supported by a recent upgrade in analyst ratings. However, the heavy put option activity at a strike price well below the current market level signals that many market participants are either hedging against a correction or speculating on downside risk.

Given the approaching expiry and the sizeable open interest in puts, volatility may increase in the short term. Investors should monitor price action closely, particularly around the 600 strike level, and consider their risk tolerance and portfolio objectives when deciding on fresh positions or adjustments.

Overall, Hindustan Zinc remains a key player in the non-ferrous metals space with solid fundamentals, but the mixed signals from the options market warrant a cautious approach in the near term.

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