Interglobe Aviation Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

Data from the derivatives market reveals that Interglobe Aviation's put options with a strike price of ₹4,600 expiring on 24 February 2026 have emerged as the most actively traded contracts. A total of 3,917 contracts changed hands, generating a turnover of approximately ₹767.46 lakhs. The open interest stands at 1,612 contracts, indicating sustained interest in downside protection or speculative bearish positioning.

The underlying stock price at the time of this activity was ₹4,609.5, placing the ₹4,600 strike price very close to the current market level. This proximity suggests that traders are positioning for a potential decline or hedging existing long exposures against near-term volatility.

Price and Volume Trends Confirm Bearish Bias

Interglobe Aviation has been trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, underscoring a sustained downtrend. The stock has recorded a consecutive two-day fall, losing 3.39% over this period, with a day-on-day decline of 3.18% on 29 January 2026. Intraday lows touched ₹4,585.5, representing a 3.44% drop from previous levels.

Volume analysis reveals that the weighted average price of traded shares has been closer to the day's low, indicating selling pressure dominating the session. Furthermore, delivery volumes have declined by 17.63% compared to the five-day average, signalling reduced investor participation and possibly increased caution among long-term holders.

Sectoral and Market Context

The airline sector has broadly underperformed, with a sectoral decline of 3% on the same day, reflecting broader headwinds such as rising fuel costs, regulatory challenges, and subdued passenger demand in certain markets. Interglobe Aviation’s performance has been in line with sector trends but has lagged the broader Sensex, which fell by only 0.56% on 29 January 2026.

With a market capitalisation of ₹1,79,688 crores, Interglobe Aviation remains a large-cap stock but currently holds a Market Cap Grade of 1, indicating limited upside potential relative to peers. The downgrade from Hold to Sell on 3 December 2025 further emphasises the cautious stance adopted by analysts and investors alike.

Investor Sentiment and Hedging Strategies

The surge in put option volumes at the ₹4,600 strike price suggests that market participants are either hedging existing long positions or speculating on further downside. Given the stock’s recent weakness and the sector’s challenges, this activity is consistent with a cautious or bearish outlook.

Open interest data supports this view, as the sizeable number of outstanding contracts indicates that traders are maintaining their bearish bets or protective hedges rather than closing positions. This pattern often precedes increased volatility around expiry dates, as traders adjust their portfolios in response to evolving market conditions.

Liquidity and Trading Viability

Despite the recent decline, Interglobe Aviation remains sufficiently liquid for sizeable trades, with an average traded value allowing for Rs 18.2 crore trade sizes based on 2% of the five-day average traded value. This liquidity ensures that institutional investors and traders can execute hedging or speculative strategies without significant market impact.

However, the falling delivery volumes and declining investor participation highlight a degree of caution among long-term holders, possibly reflecting concerns over earnings outlook or macroeconomic factors affecting the airline industry.

Outlook and Strategic Considerations

Interglobe Aviation’s current technical and derivatives market signals point to a cautious near-term outlook. The downgrade to a Sell rating and the low Mojo Score of 33.0 reflect concerns over the company’s ability to navigate sectoral headwinds effectively. Investors should closely monitor upcoming earnings releases and sector developments, particularly fuel price trends and passenger demand recovery.

For traders, the active put option interest near the current market price offers opportunities for hedging or speculative plays, but also signals potential volatility as expiry approaches. Those holding long positions may consider protective strategies, while bearish investors might find the current environment conducive for downside bets.

Overall, Interglobe Aviation’s derivatives activity and price action underscore the importance of a disciplined approach in the airline sector, balancing risk management with selective exposure to recovery prospects.

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