Interglobe Aviation Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Interglobe Aviation's put options with a strike price of ₹5,000 expiring on 30 December 2025 have witnessed significant trading volumes. A total of 7,342 contracts changed hands, generating a turnover of approximately ₹792.6 lakhs. The open interest stands at 3,467 contracts, indicating sustained interest in downside protection or speculative bearish bets.

The underlying stock price of Interglobe Aviation was ₹5,062.5 at the time of this activity, placing the ₹5,000 strike price close to the money. This proximity often attracts traders looking to hedge existing long positions or express a cautious outlook on the stock's near-term trajectory.

Stock Performance and Market Context

Interglobe Aviation has been on a steady upward trend, recording gains over the past six consecutive trading sessions. The stock has delivered a cumulative return of 5.57% during this period, with an intraday high reaching ₹5,081, marking a 2.02% increase on the day of analysis. This performance aligns closely with the airline sector, which has advanced by 2.44% over the same timeframe.

Despite the positive momentum, the stock's weighted average traded price suggests that a larger volume of shares exchanged hands nearer to the lower end of the day's price range. Additionally, the stock's price currently sits above its 5-day moving average but remains below its 20-day, 50-day, 100-day, and 200-day moving averages. This mixed technical picture may be contributing to the cautious stance reflected in the options market.

Investor participation appears to be waning, with delivery volumes on 17 December falling by 58.81% compared to the five-day average, amounting to 9.3 lakh shares. However, liquidity remains adequate, with the stock's traded value supporting sizeable transactions up to ₹36.83 crores based on 2% of the five-day average traded value.

Implications of Put Option Interest

The concentration of put option activity at the ₹5,000 strike price suggests that market participants are positioning for potential downside or seeking to hedge against volatility in Interglobe Aviation's shares. Put options provide the right to sell shares at the strike price, offering protection if the stock price declines below that level.

Given the stock's current price slightly above ₹5,000, the open interest and turnover in these puts indicate a significant level of caution. This could be attributed to broader concerns in the airline industry, including fluctuating fuel costs, regulatory changes, or macroeconomic factors impacting travel demand.

Moreover, the expiry date of 30 December 2025 is approaching, a period when traders often adjust their positions to manage risk or capitalise on expected price movements. The heavy put option volumes may also reflect speculative strategies anticipating a correction or increased volatility in the stock.

Sector and Market Comparison

Interglobe Aviation operates within the airline sector, which has shown a 2.44% gain recently, closely mirroring the stock's own performance. The broader Sensex index has recorded a more modest 0.13% return over the same period, highlighting the relative strength of the airline sector amid current market conditions.

Despite this sectoral outperformance, the subdued investor participation and the technical indicators suggest that some investors are adopting a wait-and-see approach. The put option activity reinforces this sentiment, signalling that downside risk is being actively managed.

Outlook and Investor Considerations

Interglobe Aviation's market capitalisation stands at ₹1,92,445 crores, categorising it as a large-cap stock with significant institutional interest. The recent trading patterns and option market activity suggest that investors are balancing optimism from recent gains with caution about near-term risks.

For investors, the heavy put option volumes at the ₹5,000 strike price may serve as a signal to monitor the stock closely for potential volatility around the December expiry. Hedging strategies appear to be in place, which could limit sharp downside moves but also indicate uncertainty about sustained upward momentum.

Technical indicators showing the stock trading above short-term averages but below longer-term moving averages further support a nuanced view. This mixed technical backdrop, combined with falling delivery volumes, points to a market environment where selective participation and risk management are prevailing themes.

As the airline sector continues to navigate challenges such as fluctuating fuel prices, regulatory developments, and evolving travel demand, Interglobe Aviation's stock and options activity will remain a key barometer for investor sentiment in this space.

Conclusion

The pronounced put option activity in Interglobe Aviation ahead of the 30 December 2025 expiry highlights a cautious stance among market participants. While the stock has shown resilience with gains over recent sessions, the options market suggests that downside protection and hedging are priorities for many investors. This dynamic underscores the importance of closely monitoring both price action and derivatives data to gauge evolving market sentiment in the airline sector.

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