Interglobe Aviation Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Heavy Put Option Trading Highlights Bearish Sentiment

On 12 January 2026, Interglobe Aviation’s put options with a strike price of ₹4,800 expiring on 27 January 2026 emerged as the most actively traded contracts in the segment. A total of 2,207 contracts exchanged hands, generating a turnover of ₹3.02 crores. Open interest for these puts stands at 2,543 contracts, indicating sustained investor interest in downside protection at this strike level.

The underlying stock price hovered near ₹4,821, just above the ₹4,800 strike, suggesting that traders are positioning for a potential decline or at least hedging against volatility in the near term. This activity is notable given the stock’s recent price trajectory and technical signals.

Price Performance and Technical Weakness

Interglobe Aviation has been under pressure, recording a consecutive seven-day decline that has eroded approximately 5.52% of its value. The stock’s 1-day return was -0.44%, slightly underperforming the sector’s -0.25% and broadly tracking the Sensex’s -0.47% movement on the same day. The narrow trading range of ₹44 over recent sessions reflects subdued volatility but persistent selling interest.

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a bearish trend across multiple timeframes. This technical weakness aligns with the increased put option activity, as investors seek downside protection or speculate on further declines.

Rising Investor Participation Amid Decline

Despite the downtrend, investor participation has risen notably. Delivery volumes surged to 8.27 lakh shares on 9 January 2026, marking a 46.54% increase compared to the five-day average delivery volume. This heightened activity suggests that while some investors are offloading shares, others may be accumulating at lower levels or actively hedging their positions.

Liquidity remains robust, with the stock’s traded value supporting sizeable transactions up to ₹10.57 crores based on 2% of the five-day average traded value. This liquidity facilitates active options trading and allows institutional players to implement complex hedging strategies efficiently.

Mojo Score and Rating Downgrade Reflect Market Caution

Interglobe Aviation’s current Mojo Score stands at 33.0, placing it firmly in the Sell category. This represents a downgrade from its previous Hold rating on 3 December 2025. The downgrade reflects deteriorating fundamentals and technicals, as well as the growing bearish sentiment evident in options markets.

The company’s Market Cap Grade remains at 1, indicating its status as a large-cap stock with a market capitalisation of approximately ₹1,87,079 crores. Despite its size and sector leadership, the downgrade signals caution for investors amid sectoral headwinds and stock-specific challenges.

Sectoral Context and Comparative Performance

The airline sector has faced volatility due to fluctuating fuel prices, regulatory uncertainties, and evolving travel demand patterns. Interglobe Aviation’s performance has been inline with the sector’s recent trends, but its sharper decline and technical weakness highlight company-specific pressures.

Put option activity in Interglobe Aviation surpasses that of many peers, suggesting that market participants are particularly concerned about its near-term prospects. The strike price of ₹4,800 is a critical level to watch, as sustained trading below this mark could trigger further downside momentum.

Expiry Patterns and Investor Strategies

The 27 January 2026 expiry date is attracting significant attention, with put options dominating open interest. This pattern indicates that investors are either hedging existing long positions or speculating on a decline in the stock price over the next two weeks.

Such concentrated put activity often precedes heightened volatility around expiry, as traders adjust positions and roll over contracts. Investors should monitor open interest changes and price action closely to gauge market sentiment shifts.

Investor Implications and Outlook

For investors, the heavy put option activity at the ₹4,800 strike price signals a cautious stance on Interglobe Aviation’s near-term outlook. The stock’s technical weakness and recent price declines reinforce the need for prudence, especially for those with significant exposure to the airline sector.

Hedging strategies using puts may be prudent for long holders seeking protection against further downside. Conversely, speculative traders might view the elevated put volumes as an opportunity to capitalise on potential volatility around the expiry date.

Given the downgrade to a Sell rating and the deteriorating technical picture, investors should closely monitor upcoming earnings, sector developments, and broader market conditions before increasing exposure.

Summary

Interglobe Aviation Ltd is currently navigating a challenging phase marked by sustained price declines, technical weakness, and a downgrade in its Mojo Grade to Sell. The surge in put option activity, particularly at the ₹4,800 strike expiring on 27 January 2026, underscores growing bearish sentiment and hedging demand among investors. While liquidity and investor participation remain healthy, the stock’s outlook appears cautious in the near term, warranting careful risk management and strategic positioning.

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