Interglobe Aviation Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 9 January 2026, Interglobe Aviation's put options at the 4,800 strike price for the expiry on 27 January 2026 emerged as the most actively traded contracts in the options market. A total of 2,123 contracts changed hands, generating a turnover of approximately ₹219.79 lakhs. Open interest stood at 2,629 contracts, indicating sustained interest and potential accumulation of bearish bets ahead of the expiry.

The underlying stock price was ₹4,897.50 at the time, placing the 4,800 strike slightly out-of-the-money. This positioning suggests that traders are anticipating a possible decline below this level within the next few weeks, or are seeking protection against downside risks in the near term.

Stock Performance and Technical Context

Interglobe Aviation has been under pressure recently, with the stock recording a consecutive six-day losing streak, resulting in a cumulative decline of 4.08%. The stock’s trading range has narrowed to ₹44, reflecting subdued volatility but persistent selling interest. Notably, the share price is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a bearish technical setup.

Investor participation has risen sharply, with delivery volumes on 8 January reaching 8.57 lakh shares, a 94.07% increase compared to the five-day average. This heightened activity suggests that market participants are either liquidating positions or actively hedging against further downside.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹9.07 crore, ensuring that option and equity trades can be executed efficiently without significant price impact.

Fundamental and Market Sentiment Overview

Interglobe Aviation operates in the airline sector, a segment that has faced headwinds due to fluctuating fuel prices, regulatory challenges, and evolving travel demand patterns. The company’s large market capitalisation of ₹1,88,927.07 crore classifies it as a large-cap stock, yet its current Mojo Score of 33.0 and a downgrade from Hold to Sell on 3 December 2025 reflect deteriorating fundamentals and cautious analyst outlooks.

The downgrade aligns with the observed bearish positioning in the options market, as investors appear to be factoring in potential near-term challenges for the airline industry and Interglobe Aviation specifically.

Implications of Heavy Put Option Trading

The concentration of put option activity at the 4,800 strike price suggests that market participants are positioning for a downside move of approximately 2% from the current underlying price. This level acts as a psychological and technical support zone, and the volume of puts traded indicates that investors are either hedging existing long positions or speculating on a further decline.

Open interest accumulation in puts often precedes increased volatility, especially as expiry approaches. Traders should monitor whether the stock breaches this strike price, which could trigger accelerated selling or prompt option writers to adjust their hedges.

Given the stock’s underperformance relative to the sector and the broader Sensex, which declined by 0.22% and 0.19% respectively on the same day, the bearish sentiment appears more stock-specific rather than market-wide. This divergence highlights concerns unique to Interglobe Aviation’s operational or financial outlook.

Expiry Patterns and Investor Behaviour

The January 27 expiry is the nearest monthly expiry, and the surge in put option volume ahead of this date indicates that investors are actively managing risk for the short term. The relatively high open interest compared to traded contracts suggests that many positions remain open from prior sessions, reinforcing the notion of sustained bearish sentiment.

Additionally, the stock’s narrow trading range and consistent decline over the past week may be prompting investors to seek downside protection through puts rather than outright selling shares, which can be more capital intensive and less flexible.

Outlook and Strategic Considerations

Investors should weigh the implications of the downgrade to a Sell rating and the low Mojo Score when considering exposure to Interglobe Aviation. The combination of technical weakness, increased put option activity, and fundamental headwinds suggests a cautious stance is warranted.

However, the airline sector’s cyclical nature means that any positive developments, such as easing fuel costs or improved travel demand, could quickly reverse sentiment. Traders with a higher risk appetite might consider put options as a hedging tool or a speculative vehicle to capitalise on potential near-term declines.

Long-term investors should monitor quarterly earnings and sectoral trends closely, as these will provide clearer signals on the company’s recovery trajectory and valuation support levels.

Conclusion

The pronounced activity in Interglobe Aviation’s put options at the 4,800 strike price ahead of the January expiry underscores a growing bearish consensus among investors. This is supported by the stock’s technical weakness, recent downgrade to Sell, and increased delivery volumes signalling rising investor caution.

While the airline sector remains sensitive to macroeconomic and operational factors, the current market positioning suggests that traders and investors are bracing for potential downside risks in the near term. Monitoring option open interest and price action around key technical levels will be crucial for gauging the stock’s next directional move.

For those seeking to optimise their portfolios, exploring alternative stocks with stronger momentum or more favourable fundamentals may offer better risk-adjusted returns in the current environment.

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