Interglobe Aviation Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Heavy Put Option Trading Highlights Bearish Outlook

On 5 February 2026, Interglobe Aviation's put options with a strike price of ₹4,800 expiring on 24 February 2026 emerged as the most actively traded contracts. A total of 3,303 contracts changed hands, generating a turnover of approximately ₹480.29 lakhs. The open interest for these puts stands at 1,299 contracts, indicating sustained interest in downside protection or speculative bearish bets.

The underlying stock price at the time was ₹4,851.10, just above the ₹4,800 strike, suggesting that traders are positioning for a potential decline below this level in the near term. This activity is significant given the stock’s recent price action and technical indicators.

Price Performance and Technical Context

Interglobe Aviation’s stock price has fallen by 2.68% on the day, opening with a gap down of 2.33% and touching an intraday low of ₹4,780.30, a 3.64% drop from previous levels. This decline follows three consecutive days of gains, signalling a possible trend reversal. The stock currently trades above its 5-day and 20-day moving averages but remains below its 50-day, 100-day, and 200-day averages, indicating mixed momentum and a potential resistance zone ahead.

Sector-wise, the airline industry has also declined by 2.12%, reflecting broader headwinds such as rising fuel costs, geopolitical uncertainties, and subdued passenger demand. The Sensex, by comparison, fell by a more modest 0.47%, underscoring the sector-specific pressures weighing on Interglobe Aviation.

Investor Participation and Liquidity Trends

Investor participation appears to be waning, with delivery volumes dropping sharply. On 4 February 2026, delivery volume was recorded at 5.09 lakh shares, down 55.19% against the five-day average delivery volume. This decline in participation suggests that investors may be adopting a wait-and-watch stance or reducing exposure amid uncertainty.

Despite this, liquidity remains adequate for sizeable trades, with the stock’s traded value representing about 2% of its five-day average, supporting trade sizes of up to ₹14.69 crore. This liquidity profile facilitates active options trading and hedging strategies.

Mojo Grade Downgrade Reflects Deteriorating Fundamentals

Interglobe Aviation’s Mojo Grade was downgraded from Hold to Sell on 3 December 2025, reflecting a deterioration in its fundamental and market metrics. The company’s Mojo Score of 33.0 places it firmly in the Sell category, signalling caution for investors. The downgrade was driven by concerns over profitability pressures, competitive challenges, and sector volatility.

Market capitalisation remains substantial at ₹1,87,991.52 crore, categorising Interglobe Aviation as a large-cap stock. However, its Market Cap Grade is rated 1, indicating limited upside potential relative to peers and market expectations.

Options Expiry Patterns and Investor Strategies

The 24 February 2026 expiry date for the heavily traded put options is a key near-term milestone. The concentration of open interest at the ₹4,800 strike price suggests that investors are hedging against a decline below this level or speculating on a downward move. This strike price is close to the current market price, making these puts attractive for protective strategies.

Such put option activity often precedes increased volatility, as market participants adjust positions ahead of expiry. The elevated turnover and open interest imply that traders are actively managing risk or positioning for a potential correction in Interglobe Aviation’s shares.

Sectoral and Market Implications

The airline sector’s recent underperformance, combined with Interglobe Aviation’s technical and fundamental challenges, has heightened bearish sentiment. Rising fuel prices, regulatory uncertainties, and fluctuating passenger demand continue to pressure margins. Investors appear to be adopting a cautious stance, reflected in the surge of put option volumes and declining delivery participation.

Comparatively, the Sensex’s modest decline of 0.47% on the same day highlights that the airline sector is underperforming the broader market, reinforcing the need for investors to carefully assess risk exposure in this space.

Investor Takeaways and Outlook

For investors, the surge in put option activity at the ₹4,800 strike price ahead of the 24 February expiry is a clear signal of increased caution and hedging against downside risk. The stock’s recent price weakness, combined with a downgrade in fundamental grading, suggests that downside risks remain elevated in the near term.

However, the stock’s position above short-term moving averages may offer some technical support, and any sectoral recovery or easing of cost pressures could provide relief. Investors should monitor open interest trends, expiry dynamics, and sector developments closely to gauge the stock’s trajectory.

Given the current environment, a defensive approach with risk management strategies such as protective puts or selective exposure may be prudent. The liquidity profile supports active trading and hedging, allowing investors to adjust positions efficiently.

Conclusion

Interglobe Aviation Ltd’s recent put option surge reflects a market increasingly wary of near-term downside risks amid sectoral headwinds and deteriorating fundamentals. The ₹4,800 strike price expiry on 24 February 2026 has become a focal point for bearish positioning and hedging activity. While the stock remains a large-cap leader in the airline industry, its downgraded Mojo Grade and declining investor participation underscore the need for caution.

Investors should weigh these factors carefully and consider alternative opportunities within and beyond the sector to optimise portfolio performance in a challenging market environment.

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