ITC Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment and New 52-Week Low

Put Option Activity Highlights

On 2 January 2026, ITC Ltd. (NSE: ITC) recorded significant volumes in put options expiring on 27 January 2026. The most actively traded strike prices ranged from ₹305 to ₹370, with the highest open interest concentrated at the ₹370 strike, where 4,289 contracts remain open. This level is notably above the current underlying share price of ₹348.90, indicating a strong bearish hedge or speculative stance anticipating further downside.

Specifically, the ₹370 strike saw 2,695 contracts traded on the day, generating a turnover of ₹977.96 lakhs. The ₹365 strike followed closely with 2,419 contracts traded and a turnover of ₹717.18 lakhs. Lower strikes such as ₹325 and ₹305 also attracted substantial activity, with 3,568 and 2,278 contracts traded respectively, reflecting a broad spectrum of bearish positioning across different price levels.

Underlying Share Price and Technical Context

ITC’s share price has been under pressure, hitting a fresh 52-week low of ₹345.25 on the same day. The stock has declined by 13.67% over the past two trading sessions, underperforming its sector peers in the Cigarettes/Tobacco segment, which fell by 3.84%. The weighted average traded price skewed towards the day’s low, signalling selling pressure throughout the session.

Technically, ITC is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a sustained downtrend. This technical weakness likely fuels the increased demand for put options as investors seek downside protection or aim to capitalise on further declines.

Investor Participation and Liquidity

Investor participation has surged notably, with delivery volumes reaching 15.66 crore shares on 1 January 2026, a staggering 969.83% increase compared to the five-day average. This heightened activity suggests that market participants are actively repositioning their portfolios amid the stock’s recent weakness.

Liquidity remains robust, with the stock’s traded value supporting sizeable trade sizes up to ₹56.84 crore based on 2% of the five-day average traded value. This liquidity facilitates the active options market and allows for efficient execution of hedging strategies.

Mojo Score and Analyst Ratings

ITC Ltd. currently holds a Mojo Score of 46.0, reflecting a Sell rating, which was downgraded from Hold on 29 December 2025. The downgrade aligns with the stock’s recent price weakness and deteriorating fundamentals. The Market Cap Grade remains at 1, indicating its status as a large-cap stock with a market capitalisation of approximately ₹4,55,991 crore.

This rating shift and the bearish options activity suggest that market participants are increasingly cautious about ITC’s near-term prospects, possibly anticipating further downside or volatility.

Expiry Patterns and Market Sentiment

The concentration of put option open interest at strikes above the current market price, particularly at ₹370 and ₹365, indicates that traders are positioning for a potential drop or are hedging existing long positions. The expiry date of 27 January 2026 is less than a month away, which may lead to increased volatility as the expiry approaches and traders adjust their positions.

Moreover, the substantial turnover in put options at multiple strike prices suggests a broad-based bearish sentiment rather than isolated speculative bets. This pattern often precedes a period of heightened market uncertainty or correction in the underlying stock.

Sectoral and Broader Market Context

Within the FMCG sector, ITC’s underperformance contrasts with the broader market, where the Sensex recorded a modest gain of 0.32% on the same day. The Cigarettes/Tobacco sector’s decline of 3.84% further compounds ITC’s challenges, reflecting sector-specific headwinds such as regulatory pressures and changing consumer preferences.

Investors should weigh these sectoral dynamics alongside ITC’s individual performance when considering exposure to the stock or related derivatives.

Investor Implications and Outlook

The surge in put option activity at multiple strike prices, combined with ITC’s technical weakness and sectoral headwinds, suggests that investors are bracing for further downside or increased volatility in the near term. The stock’s breach of key moving averages and fresh 52-week lows reinforce this cautious stance.

For long-term investors, the current environment may warrant a reassessment of risk exposure, particularly given the recent downgrade to a Sell rating. Traders and hedgers are likely utilising put options to protect portfolios or speculate on continued weakness, which could amplify price swings as expiry approaches.

Market participants should monitor open interest trends and volume in the options market closely, as shifts in positioning can provide early signals of changing sentiment or potential reversals.

Summary

In summary, ITC Ltd. is experiencing heightened bearish sentiment as evidenced by heavy put option trading activity ahead of the January 27 expiry. The stock’s technical deterioration, sectoral pressures, and downgrade to a Sell rating underpin this cautious outlook. Investors and traders alike are employing options strategies to hedge or capitalise on expected volatility, making ITC a focal point for derivative market watchers in the FMCG space.

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