Interglobe Aviation Sees Surge in Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the latest trading session reveals that Interglobe Aviation’s put options expiring on 27 January 2026 have attracted significant interest, particularly at strike prices close to and above the current market price. The most actively traded put contract was at the ₹4,700 strike, with 7,031 contracts changing hands, generating a turnover of approximately ₹315.87 lakhs and an open interest of 3,729 contracts. This level of open interest suggests a strong build-up of bearish bets or protective hedges at this strike.

Other notable strike prices include ₹4,750, where 4,890 contracts were traded with a turnover of ₹322.52 lakhs and open interest of 1,410, and ₹4,900, which saw 3,014 contracts traded with a substantial turnover of ₹526.74 lakhs despite a lower open interest of 1,280. The ₹4,600 and ₹4,500 strikes also recorded active trading, with 3,004 and 2,747 contracts respectively, indicating a broad range of put strikes attracting investor attention.

Market Context and Stock Performance

Interglobe Aviation’s share price has experienced a mild correction, falling 1.58% on the day to close near ₹4,832, slightly underperforming the airline sector’s 1.39% decline and contrasting with the Sensex’s marginal 0.04% gain. The stock’s intraday low touched ₹4,722.5, a 3.8% drop from recent highs, signalling some profit-taking or cautious sentiment among traders.

Technical indicators show the stock trading above its 5-day moving average but below longer-term averages including the 20-day, 50-day, 100-day, and 200-day moving averages. This mixed technical picture suggests short-term resilience amid longer-term pressure, which may be prompting investors to seek downside protection through put options.

Investor participation has risen notably, with delivery volumes on 22 January reaching 8.35 lakh shares, a 17.28% increase over the five-day average. Liquidity remains robust, supporting trade sizes up to ₹14.1 crore based on 2% of the five-day average traded value, facilitating active options and equity trading.

Bearish Positioning and Hedging Implications

The concentration of put option volumes at strikes above the current market price indicates a cautious or bearish stance among market participants. The ₹4,700 and ₹4,750 strikes, in particular, have attracted significant open interest, suggesting that investors are either hedging existing long positions or speculating on a potential downside move in Interglobe Aviation’s shares.

Given the airline sector’s sensitivity to macroeconomic factors such as fuel prices, regulatory changes, and travel demand fluctuations, the surge in put buying may reflect concerns over near-term headwinds. The stock’s Mojo Score of 33.0 and a downgrade from Hold to Sell on 3 December 2025 further underline the cautious outlook from fundamental analysts, reinforcing the bearish sentiment evident in the options market.

Moreover, the large turnover in put options, especially at the ₹4,900 strike, which is above the current price, points to speculative strategies or protective hedges against a possible sharp correction. This elevated activity ahead of the January expiry is typical as investors adjust portfolios and manage risk in a volatile environment.

Valuation and Market Capitalisation Context

Interglobe Aviation remains a large-cap stock with a market capitalisation of approximately ₹1,89,963 crore, positioning it as a key player in the Indian airline industry. Despite its size, the stock’s Market Cap Grade is rated 1, reflecting challenges in sustaining growth or profitability in the current market cycle. The downgrade in Mojo Grade from Hold to Sell signals deteriorating fundamentals or increased risk factors that investors should consider.

Comparatively, the airline sector has been under pressure due to rising operational costs and competitive dynamics, which may be contributing to the cautious positioning seen in the options market. Investors should weigh these factors carefully when assessing Interglobe Aviation’s risk-reward profile in the near term.

Expiry Patterns and Investor Strategy

The January 27 expiry date is a critical juncture for options traders, as positions are squared off or rolled forward. The heavy put option volumes at multiple strike prices suggest that investors are actively managing downside risk or positioning for a potential correction in the coming week.

Such activity often precedes increased volatility, as market participants adjust their exposures. The clustering of open interest around the ₹4,700 strike, which is roughly 2.7% below the current market price, indicates a key support level that traders are watching closely. Should the stock breach this level, it could trigger further downside momentum, validating the bearish bets.

Conversely, if Interglobe Aviation manages to hold above these strikes, the put option premiums may decay rapidly, benefiting option sellers. This dynamic underscores the importance of monitoring price action and open interest changes in the final days before expiry.

Conclusion: Cautious Outlook Amid Elevated Put Activity

The surge in put option trading for Interglobe Aviation Ltd ahead of the 27 January expiry reflects a cautious market stance, with investors seeking protection or speculating on downside risks. The stock’s recent price weakness, combined with a downgrade in fundamental ratings and a modest Mojo Score, supports the bearish positioning evident in the options market.

While the airline sector remains sensitive to external factors, Interglobe Aviation’s large-cap status and liquidity provide ample opportunity for active traders to manage risk through options strategies. Investors should remain vigilant of price movements around key strike prices and expiry dates to navigate the evolving market landscape effectively.

Overall, the current options activity suggests that market participants are bracing for potential volatility and downside risk in Interglobe Aviation shares, making it imperative for investors to reassess their exposure and hedging approaches in the near term.

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