Jindal Steel Sees Heavy Put Option Activity Amid Bullish Price Momentum

Put Option Activity Highlights

The put options for Jindal Steel Ltd. (underlying symbol: JINDALSTEL) with a strike price of ₹1000 and expiry on 27 January 2026 have witnessed remarkable trading volumes. A total of 1,172 contracts changed hands, generating a turnover of approximately ₹69.81 lakhs. Open interest stands at 986 contracts, indicating sustained interest in downside protection or bearish bets at this strike level.

Given the current underlying stock price of ₹1,052.90, the ₹1000 strike puts are trading slightly out-of-the-money, suggesting that traders are positioning for a potential correction or hedging against downside risk in the coming weeks. This activity is notable considering the stock’s recent upward momentum.

Price Performance and Technical Context

Jindal Steel Ltd. has been on a strong run, gaining 7.14% over the last three consecutive trading sessions. On 31 December 2025, the stock opened with a gap-up of 2.07% and touched an intraday high of ₹1,065, marking a 4.28% increase from the previous close. It currently trades just 3.89% below its 52-week high of ₹1,098, signalling sustained bullish sentiment among investors.

Technically, the stock is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reinforcing its positive trend. This outperformance is also reflected relative to its sector, with the Ferrous Metals segment gaining 2.42% on the day, while Jindal Steel outpaced this with a 3.37% gain. The broader Sensex rose by a modest 0.17% on the same day.

Investor participation has also increased notably, with delivery volumes rising to 8.16 lakh shares on 30 December, a 62.7% increase compared to the five-day average. This heightened liquidity supports the stock’s capacity to absorb larger trades without significant price disruption, with an estimated tradable value of ₹2.63 crore based on 2% of the five-day average traded value.

Bearish Positioning Versus Bullish Fundamentals

The surge in put option activity at the ₹1000 strike price suggests that some market participants are either hedging existing long positions or speculating on a near-term pullback. This is a common strategy in volatile sectors such as Ferrous Metals, where commodity price fluctuations and global demand dynamics can impact stock prices.

However, the fundamental backdrop for Jindal Steel remains relatively stable. The company holds a large-cap market capitalisation of ₹1,04,166 crore and has recently seen its Mojo Grade upgraded from Sell to Hold as of 11 November 2025, reflecting an improvement in its financial and operational metrics. The current Mojo Score of 57.0 indicates a moderate outlook, with neither strong buy nor sell signals dominating.

Investors should note that the stock’s recent outperformance relative to its sector and the Sensex, combined with rising delivery volumes, points to genuine buying interest rather than purely speculative option hedging. The steel industry’s cyclical nature means that short-term volatility is to be expected, but the medium-term trend remains constructive.

Expiry Patterns and Market Implications

The January 2026 expiry date for the active put options provides a window of approximately four weeks from the current date, allowing traders to position for potential market corrections or sector-specific risks. The concentration of open interest near the ₹1000 strike price could act as a psychological support level, with option writers potentially defending this level to avoid assignment.

Given the stock’s proximity to its 52-week high and the strong technical setup, any significant breach below ₹1000 could trigger accelerated downside moves, amplified by option-related hedging flows. Conversely, if the stock maintains its upward momentum, these put options may expire worthless, benefiting option sellers and reinforcing bullish sentiment.

Sector and Market Context

The Ferrous Metals sector, encompassing steel, sponge iron, and pig iron, has gained 2.42% recently, supported by improving demand fundamentals and stable raw material costs. Jindal Steel’s outperformance within this sector highlights its relative strength and investor confidence in its operational execution.

Market participants should also consider broader macroeconomic factors such as infrastructure spending, export demand, and commodity price trends, which will influence the sector’s trajectory in the coming months. The stock’s liquidity profile and large-cap status make it a preferred choice for institutional investors seeking exposure to the steel industry.

Investor Takeaway

Jindal Steel Ltd.’s heavy put option activity at the ₹1000 strike price signals cautious positioning among some traders, possibly reflecting concerns over short-term volatility or sector-specific risks. However, the stock’s strong price performance, technical strength, and improving fundamental ratings suggest that the underlying trend remains positive.

Investors should monitor the stock’s price action around the ₹1000 level closely, as this may serve as a key support zone influenced by option expiry dynamics. Additionally, keeping an eye on sector developments and broader market conditions will be crucial for assessing the sustainability of the current rally.

With a large-cap market cap of over ₹1 lakh crore and a Mojo Grade upgraded to Hold, Jindal Steel presents a balanced risk-reward profile for investors seeking exposure to the Ferrous Metals sector. The interplay between option market activity and price momentum offers valuable insights into market sentiment and potential future moves.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Today