Interglobe Aviation Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

Data from the derivatives segment reveals that Interglobe Aviation's put options expiring on 30 December 2025 have attracted substantial interest across multiple strike prices. Notably, the strike prices of ₹4,700 and ₹4,600 have recorded the highest number of contracts traded, with 4,450 and 4,257 contracts respectively. These strikes also show elevated open interest levels, standing at 2,265 and 2,505 contracts, signalling considerable open positions held by market participants.

Further down the strike price ladder, the ₹4,950 and ₹4,850 puts have also seen active trading, with 3,633 and 3,935 contracts exchanged. Open interest at these levels remains robust, at 1,257 and 1,339 contracts respectively. The ₹4,000 strike, considerably out-of-the-money relative to the current underlying value of ₹4,862.5, has recorded 4,192 contracts traded and an open interest of 1,635 contracts, indicating some hedging or speculative positioning at lower price levels.

Turnover figures for these put options underscore the scale of activity, with the ₹4,950 strike generating approximately ₹1194.8 lakhs, while the ₹4,850 strike accounts for ₹1083 lakhs in turnover. The ₹4,700 and ₹4,600 strikes have turnover values of ₹899.7 lakhs and ₹705.5 lakhs respectively, reflecting strong investor engagement in these contracts.

Price and Market Context

Interglobe Aviation's stock price has been under pressure, trading at ₹4,862.5 as of the latest data, which is below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This technical positioning suggests a bearish trend in the near to medium term. The stock has recorded a consecutive decline over the past eight trading sessions, resulting in a cumulative return of -16.92% during this period.

Despite this, the stock marginally outperformed its sector on the day, with a 1-day return of -0.99% compared to the airline sector's -0.76% and the Sensex's -0.74%. This relative performance indicates that while the stock is facing headwinds, it is not lagging significantly behind its peers or the broader market.

Investor participation has shown notable signs of activity, with delivery volume on 8 December reaching 76.79 lakh shares. This volume represents a 373.29% increase compared to the 5-day average delivery volume, suggesting heightened trading interest and possibly increased hedging or speculative activity in the stock.

Implications of Put Option Concentration

The concentration of put option activity at strike prices ranging from ₹4,600 to ₹4,950 suggests a cautious or bearish stance among investors and traders. Put options serve as a tool for hedging downside risk or speculating on price declines, and the elevated open interest at these strikes indicates that market participants are positioning for potential weakness in Interglobe Aviation's share price over the coming weeks.

Given the expiry date of 30 December 2025, these options provide a window for investors to manage risk or capitalise on anticipated volatility during the year-end period, which often sees increased market activity due to portfolio rebalancing and macroeconomic developments.

Moreover, the significant turnover and contract volumes at strikes close to the current underlying price reflect active engagement from both hedgers and speculators. The presence of substantial open interest at the ₹4,000 strike, well below the current market price, may indicate longer-term protective strategies or speculative bets on a more pronounced decline.

Liquidity and Trading Considerations

Interglobe Aviation's stock is classified as a large-cap company with a market capitalisation of approximately ₹1,88,462.92 crores. The stock's liquidity profile supports sizeable trade volumes, with the capacity to handle trade sizes up to ₹63.42 crores based on 2% of the 5-day average traded value. This liquidity facilitates active participation from institutional and retail investors alike.

The recent surge in delivery volume and the stock's trading below all major moving averages may encourage further derivative activity as market participants seek to hedge or speculate amid prevailing uncertainty.

Outlook and Investor Takeaways

The current derivatives market activity surrounding Interglobe Aviation highlights a cautious sentiment among investors as the stock navigates a challenging technical landscape. The persistent decline over recent sessions, combined with the stock trading below all key moving averages, aligns with the observed put option interest, which may be interpreted as a protective or bearish stance.

Investors should consider the implications of this derivatives activity in conjunction with broader market conditions and company fundamentals. While the airline sector remains sensitive to macroeconomic factors such as fuel prices, regulatory changes, and travel demand fluctuations, the elevated put option volumes suggest that market participants are preparing for potential near-term volatility.

Given the stock's large-cap status and liquidity, these derivative positions could influence price movements as expiry approaches, particularly if market conditions shift or new information emerges.

Careful monitoring of open interest trends, strike price concentrations, and underlying price action will be essential for investors seeking to understand the evolving market dynamics around Interglobe Aviation.

Summary of Key Metrics

• Underlying stock price: ₹4,862.5

• Most active put option expiry: 30 December 2025

• Highest put contracts traded: 4,450 at ₹4,700 strike

• Significant open interest: 2,505 contracts at ₹4,600 strike

• Turnover in put options: Up to ₹1,194.8 lakhs at ₹4,950 strike

• Consecutive decline: 8 trading days, cumulative -16.92% return

• Delivery volume spike: 76.79 lakh shares on 8 December, 373.29% above 5-day average

• Market capitalisation: ₹1,88,462.92 crores (Large Cap)

Investors and market watchers should weigh these factors carefully as they assess Interglobe Aviation’s near-term prospects and derivative market positioning.

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