Robust Price Performance Amidst Elevated Put Option Interest
Hindustan Zinc Ltd (HINDZINC), a leading player in the non-ferrous metals sector, has been on a strong upward trajectory in recent sessions. The stock recorded a new 52-week high of ₹733 on 27 Jan 2026, marking a 4.91% intraday gain and extending a two-day winning streak that has delivered 7.39% returns. This performance outpaced the broader Metal - Non Ferrous sector, which gained 2.6%, and the Sensex, which rose a modest 0.37% on the same day.
Trading volumes have also surged, with delivery volumes on 23 Jan reaching 80.93 lakh shares, a 14.68% increase over the five-day average. The stock trades comfortably above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a sustained bullish trend. Liquidity remains robust, supporting sizeable trade sizes up to ₹44.41 crore based on 2% of the five-day average traded value.
Put Option Activity Highlights Bearish Hedging or Speculation
Contrary to the bullish price action, the options market reveals a surge in put option activity, particularly at the ₹700 strike price expiring on 27 Jan 2026. Data shows 2,056 put contracts traded on this strike, generating a turnover of ₹18.89 lakh and an open interest of 1,257 contracts. The underlying stock price at ₹720.8 remains above this strike, suggesting that investors may be employing puts either as a hedge against potential downside or speculating on a near-term correction.
This elevated put interest at a strike below the current market price is often interpreted as a protective strategy by long holders or cautious bearish bets by traders anticipating a pullback. Given the stock’s recent upgrade from a mojo grade of Hold to Buy on 9 Oct 2025, with a mojo score of 71.0, the mixed signals from price and options activity warrant close monitoring.
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Expiry Patterns and Implications for Investors
The expiry date of 27 Jan 2026 coincides with the day of heightened put option activity, indicating that traders are positioning themselves ahead of this critical date. The strike price of ₹700 is approximately 2.8% below the current underlying value, which may reflect a cautious stance given the stock’s recent rapid ascent. Investors holding long positions might be buying puts as insurance against a sudden reversal, while speculative traders could be betting on a short-term dip to capitalise on volatility.
Open interest of 1,257 contracts at this strike is significant relative to the traded volume, suggesting that many positions remain open and could influence price dynamics as expiry approaches. The interplay between the bullish technical indicators and bearish options positioning creates a nuanced risk-reward scenario for market participants.
Fundamental Strength Supports Positive Outlook
Hindustan Zinc’s fundamentals remain robust, supported by its large-cap status with a market capitalisation of ₹3,04,222.97 crore. The company operates in the non-ferrous metals industry, a sector that has shown resilience amid global commodity price fluctuations. The mojo score of 71.0 and upgraded mojo grade to Buy reflect improved financial metrics, trend assessments, and quality grades, reinforcing confidence in the stock’s medium-term prospects.
Despite the recent uptick in put option activity, the stock’s strong price momentum and sector outperformance suggest that any downside risks may be limited or short-lived. Investors should weigh the protective benefits of put options against the prevailing bullish technical and fundamental backdrop.
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Investor Takeaway: Balancing Bullish Momentum with Protective Strategies
Hindustan Zinc’s recent price gains and sector-leading performance have attracted increased investor attention, reflected in both spot market activity and options trading. The surge in put option volumes at the ₹700 strike price ahead of expiry suggests a degree of caution or hedging among market participants, despite the stock’s strong fundamentals and mojo upgrade.
For investors, this presents a dual narrative: the underlying strength and positive outlook support continued appreciation, while the options market signals prudent risk management amid potential volatility. Monitoring open interest trends and expiry dynamics will be crucial in the coming days to gauge whether bearish positioning intensifies or unwinds.
Overall, Hindustan Zinc remains a compelling large-cap stock in the non-ferrous metals sector, combining solid fundamentals with active market participation. The interplay between bullish price action and elevated put option activity highlights the sophisticated strategies employed by investors navigating current market conditions.
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