ITC Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Highlights Bearish Outlook

On 30 January 2026, ITC Ltd. emerged as the most active stock in put options, with 2,437 contracts traded at the ₹320 strike price for the expiry date of 24 February 2026. This activity generated a turnover of ₹30.80 crores, underscoring significant investor interest in downside protection or speculative bearish bets. The open interest for these puts stands at 3,757 contracts, indicating sustained demand for downside exposure as the expiry approaches.

The underlying stock price at the time was ₹321.20, hovering just above the ₹320 strike, which suggests that traders are positioning for a potential decline or increased volatility in the near term. The put option volume and open interest levels are particularly noteworthy given ITC’s status as a large-cap FMCG company with a market capitalisation of ₹3,99,244 crores.

Price Action and Technical Indicators Signal Weakness

ITC’s stock price recently hit a new 52-week low of ₹316.45, marking a fresh nadir for the share in the past year. Despite this, the stock outperformed its sector by 0.43% on the day, registering a 0.86% gain compared to the sector’s 1.27% rise and the Sensex’s decline of 0.48%. This relative strength, however, masks underlying technical weakness as ITC trades below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish trend across multiple timeframes.

Investor participation appears to be waning, with delivery volume on 29 January falling by 32.25% against the five-day average, suggesting reduced conviction among buyers. Liquidity remains adequate, with the stock’s traded value supporting sizeable transactions up to ₹16.79 crores, ensuring that option market activity is backed by sufficient underlying market depth.

Mojo Score Downgrade Reflects Deteriorating Fundamentals

MarketsMOJO’s proprietary scoring system has downgraded ITC Ltd. from a Hold to a Sell rating as of 29 December 2025, with a Mojo Score of 48.0. This downgrade reflects a deterioration in the company’s financial and market metrics, including a Market Cap Grade of 1, indicating limited upside potential relative to peers. The downgrade aligns with the increased put option activity, suggesting that market participants are factoring in potential headwinds for the stock in the coming months.

Investors should note that the FMCG sector, while generally defensive, is currently facing challenges such as rising input costs and muted volume growth, which may be weighing on ITC’s outlook. The combination of technical weakness, bearish options positioning, and fundamental downgrades paints a cautious picture for the stock.

Expiry Patterns and Strike Price Concentration

The concentration of put option activity at the ₹320 strike price, just below the current market price, is indicative of a key support level that traders are closely monitoring. The expiry date of 24 February 2026 is less than a month away, which may intensify volatility as traders adjust their positions. The open interest build-up at this strike suggests that many investors are either hedging existing long positions or speculating on a near-term decline.

Such patterns often precede significant price movements, as option sellers and buyers reposition ahead of expiry. The sizeable turnover of ₹30.80 crores in put options further confirms the heightened interest and potential for increased price swings in ITC’s shares.

Investor Implications and Strategic Considerations

For investors holding ITC shares, the surge in put option activity and the technical indicators suggest a need for caution. The stock’s failure to sustain levels above key moving averages and the fresh 52-week low point to a weakening trend. Those seeking to hedge downside risk may find the current put option strikes attractive, while speculative traders might view the elevated open interest as a signal of potential volatility ahead.

Conversely, long-term investors should weigh the fundamental downgrade and sector challenges against ITC’s entrenched market position and diversified business model. The stock’s liquidity and large market capitalisation provide some cushion, but the prevailing market sentiment appears tilted towards caution.

Monitoring option expiry dynamics and open interest changes in the coming weeks will be crucial for gauging the stock’s near-term direction. Additionally, tracking broader FMCG sector trends and macroeconomic factors will help contextualise ITC’s performance within the larger market environment.

Conclusion

ITC Ltd.’s recent surge in put option trading at the ₹320 strike price expiring on 24 February 2026 highlights a growing bearish sentiment among investors. Coupled with a downgrade in its Mojo Grade to Sell and technical weakness across multiple moving averages, the stock faces headwinds in the near term. While the stock has shown some relative strength against its sector, the overall picture suggests increased caution and the potential for heightened volatility as expiry approaches.

Investors should carefully assess their risk exposure and consider alternative opportunities within FMCG and other sectors, as identified by market analysts. The evolving options market activity provides valuable insights into market expectations and can serve as a useful tool for informed decision-making.

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