ITC Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment Ahead of January Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that ITC Ltd. has attracted substantial put option interest across multiple strike prices for the expiry on 27 January 2026. The most active strike price is ₹350, with 6,557 contracts traded, generating a turnover of approximately ₹724.94 lakhs and an open interest of 12,728 contracts. This is closely followed by the ₹340 strike, which saw 4,505 contracts traded with a turnover of ₹249.40 lakhs and an open interest of 7,716 contracts.

Other notable strikes include ₹345, with 3,074 contracts traded and turnover of ₹246.90 lakhs, and ₹330, which recorded 2,098 contracts traded with turnover of ₹63.78 lakhs. The underlying stock price at the time stood at ₹351.90, indicating that these put options are positioned near or slightly below the current market price, suggesting a protective stance or bearish bets by traders.

Market Context and Stock Performance

ITC Ltd. is currently trading just 1.81% above its 52-week low of ₹345.25, underscoring the stock’s recent weakness. The share price has underperformed its FMCG sector peers by 0.37% on the day, while the broader Sensex index declined by 0.15%. Despite a modest gain of 0.59% in the stock price on the latest trading session, ITC remains below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a persistent downtrend.

Investor participation has been rising, with delivery volumes reaching 5.6 crore shares on 2 January 2026, a 23.66% increase over the five-day average. This heightened activity suggests that market participants are actively repositioning ahead of the expiry, possibly adjusting hedges or expressing bearish views through put options.

Bearish Positioning and Hedging Implications

The concentration of put option open interest at strike prices ranging from ₹330 to ₹350, all below or near the current market price, indicates a clear bearish bias among traders. The highest open interest at ₹350 strike, with over 12,700 contracts, suggests that many investors are either hedging existing long positions or speculating on a potential downside move in ITC’s share price.

Put options serve as a protective tool against declines, and the elevated volumes and open interest in these strikes imply that market participants are bracing for volatility or a correction in the near term. This is further corroborated by the stock’s technical weakness, trading below all major moving averages and close to its yearly lows.

Fundamental and Market Sentiment Considerations

ITC Ltd. operates in the FMCG sector, a space that has faced mixed headwinds recently due to inflationary pressures and changing consumer spending patterns. The company’s current Mojo Score stands at 48.0, with a Mojo Grade of Sell, downgraded from Hold as of 29 December 2025. This downgrade reflects deteriorating fundamentals or market sentiment, reinforcing the cautious stance observed in the options market.

With a large market capitalisation of ₹4,41,144.67 crore, ITC remains a heavyweight in the FMCG sector. However, its Market Cap Grade is rated 1, indicating limited upside potential relative to its size and sector peers. The combination of technical weakness, bearish options positioning, and a recent downgrade suggests investors should approach the stock with caution in the near term.

Expiry Patterns and Strategic Outlook

The expiry date of 27 January 2026 is critical, as it marks the settlement of these active put options. The clustering of open interest near the ₹350 strike price could lead to significant price support or resistance levels as expiry approaches. If the stock remains below this level, put option holders may exercise their rights, potentially exerting downward pressure on the share price.

Conversely, if ITC manages to rebound above these strikes, the bearish put positions could lose value, prompting unwinding of hedges and short positions. Investors and traders should monitor price action closely in the coming weeks to gauge the evolving sentiment and adjust their strategies accordingly.

Investor Takeaway

For investors in ITC Ltd., the current environment calls for prudence. The heavy put option activity near the ₹350 strike price signals that market participants are either hedging against downside risk or positioning for a decline. Given the stock’s proximity to its 52-week low and its technical underperformance relative to sector and benchmark indices, a cautious approach is warranted.

Long-term investors should monitor fundamental developments closely, especially any changes in earnings outlook or sector dynamics that could alter the stock’s trajectory. Traders may consider the options market data as a valuable indicator of near-term sentiment and potential volatility around the January expiry.

Overall, ITC Ltd.’s current put option landscape reflects a market grappling with uncertainty and bearish expectations, underscoring the importance of risk management and strategic positioning in the weeks ahead.

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