ITC Ltd. Sees Heavy Put Option Activity Ahead of December Expiry

Overview of Put Option Activity

Data from the options market reveals that ITC Ltd. has recorded substantial trading volumes in put options expiring on 30 December 2025. The most active strike prices are ₹400, ₹390, and ₹395, all clustered closely around the stock’s underlying value of ₹400.20. Specifically, the ₹400 strike saw 4,017 contracts traded, generating a turnover of approximately ₹318.15 lakhs and an open interest of 2,892 contracts. The ₹390 strike followed with 3,887 contracts traded, turnover of ₹131.85 lakhs, and open interest standing at 3,362 contracts. The ₹395 strike price recorded 1,467 contracts traded, turnover of ₹77.93 lakhs, and open interest of 1,132 contracts.

This concentration of put option activity near the current price level indicates that market participants are positioning themselves for potential downside risk or seeking protection against adverse price movements in ITC Ltd. over the coming month.

Price and Market Context

ITC Ltd. is trading close to its 52-week low, with the current price approximately 2.68% above the low of ₹390.15. The stock has experienced a two-day consecutive decline, with a cumulative return of -0.84% during this period. Its performance today aligns closely with the broader FMCG sector, which itself has seen a 1-day return of -0.92%, while the Sensex index recorded a positive 0.32% return.

Technical indicators show ITC trading below its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning often signals a bearish trend or consolidation phase, which may be contributing to the increased put option interest as investors seek downside protection.

Investor participation appears to be moderating, with delivery volumes on 28 November recorded at 57.97 lakh shares, representing a decline of 10.59% compared to the five-day average delivery volume. Despite this, liquidity remains sufficient for sizeable trades, with the stock’s average traded value supporting transactions up to ₹8.03 crore based on 2% of the five-day average.

Implications of Put Option Concentration

The clustering of put options at strike prices near the current market value often reflects a market consensus that downside risk is a material consideration in the near term. Investors may be employing these options as a hedge against existing long positions in ITC Ltd., or speculating on a potential price correction before the expiry date.

Open interest figures provide insight into the level of outstanding contracts that remain active. The ₹390 strike price, with an open interest of 3,362 contracts, suggests a significant number of investors are maintaining bearish or protective positions at this level. Similarly, the ₹400 strike’s open interest of 2,892 contracts reinforces this view.

Given the expiry date of 30 December 2025, these positions will be closely monitored as the month progresses, with any shifts in the underlying stock price likely to influence option premiums and investor sentiment.

Sector and Market Capitalisation Context

ITC Ltd. operates within the FMCG sector, a segment known for its resilience and steady demand patterns. The company holds a large-cap market capitalisation of approximately ₹5,06,663 crore, underscoring its prominence in the Indian equity market.

While the FMCG sector has experienced modest declines recently, ITC’s performance remains broadly in line with sector trends. The stock’s current trading below all major moving averages may reflect broader sectoral pressures or company-specific factors influencing investor outlook.

Investor Strategies and Outlook

Market participants utilising put options on ITC Ltd. appear to be adopting a cautious approach, possibly anticipating volatility or downside risk in the near term. The proximity of strike prices to the current stock price suggests that these options serve as a tactical tool for risk management rather than speculative bets far out of the money.

Given the stock’s recent price behaviour and technical indicators, investors may be seeking to protect gains or limit losses ahead of the December expiry. The open interest and turnover figures indicate active engagement from both institutional and retail traders in the options market.

As the expiry date approaches, monitoring changes in open interest and volume across these strike prices will provide further clarity on market sentiment and potential price trajectories for ITC Ltd.

Conclusion

ITC Ltd.’s options market activity ahead of the 30 December 2025 expiry highlights a notable concentration of put option contracts near the current trading price. This pattern reflects a degree of caution among investors, who appear to be positioning for potential downside or employing hedging strategies amid a subdued price environment.

With the stock trading close to its 52-week low and below key moving averages, the options data complements the broader technical and market context. Investors and analysts will be watching closely for developments in the underlying stock price and options metrics as the expiry date nears, which may offer insights into future market direction for this FMCG heavyweight.

Overall, the put option activity underscores the importance of risk management in current market conditions and highlights ITC Ltd. as a focal point for investor attention within the FMCG sector.

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