Kalyan Jewellers Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

The put options for Kalyan Jewellers (underlying symbol: KALYANKJIL) with a strike price of ₹470 and expiry on 27 January 2026 have recorded significant trading volumes. A total of 1,874 contracts changed hands, generating a turnover of approximately ₹13.67 crores. Open interest currently stands at 777 contracts, indicating that a substantial number of investors are maintaining bearish positions or hedges through these options.

This level of activity is particularly notable given the stock’s underlying value of ₹482.6, which is just above the strike price, suggesting that traders are anticipating a potential decline below this level before the expiry date. The concentration of put option interest at ₹470 reflects a key psychological and technical support level that market participants are closely monitoring.

Price Performance and Technical Context

Kalyan Jewellers has been under pressure in recent sessions, with the stock falling by 2.37% on the latest trading day, significantly underperforming the Gems, Jewellery and Watches sector, which declined by only 0.10%. Over the past five trading days, the stock has recorded a cumulative loss of 7.56%, marking a consecutive decline that has eroded investor confidence.

Intraday, the stock touched a low of ₹480.2, down 3.08%, and is currently trading below all major moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical weakness reinforces the bearish outlook reflected in the options market.

Investor participation has also waned, with delivery volumes on 13 January falling by 54.26% compared to the five-day average, signalling reduced conviction among buyers. Despite this, liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹6.38 crores, ensuring that option and stock trades can be executed without significant market impact.

Mojo Score and Analyst Ratings

Kalyan Jewellers currently holds a Mojo Score of 50.0, placing it in the 'Hold' category after an upgrade from a previous 'Sell' rating on 8 December 2025. This shift reflects a cautious stance by analysts who recognise the stock’s challenges but also acknowledge potential stabilisation. The company’s market capitalisation stands at ₹51,014 crores, categorising it as a mid-cap stock within the Gems, Jewellery and Watches sector.

Despite the upgrade, the stock’s Market Cap Grade remains low at 2, indicating limited market capitalisation strength relative to peers. The downgrade in investor sentiment is evident in the recent price action and option market positioning, suggesting that investors are hedging against further downside risks.

Expiry Patterns and Investor Positioning

The expiry date of 27 January 2026 is critical as it coincides with the end of the current monthly options cycle. The heavy put option volume at the ₹470 strike price suggests that investors are either speculating on a decline or seeking protection against losses in their underlying holdings. The open interest of 777 contracts indicates that these positions are not merely speculative but are being held for strategic hedging or directional bets.

Given the stock’s recent underperformance relative to the sector and the broader Sensex, which declined marginally by 0.02% on the same day, the bearish positioning in options aligns with a cautious market outlook. The sustained fall over five consecutive days and the breach of key moving averages reinforce the likelihood of continued volatility.

Sectoral and Market Context

The Gems, Jewellery and Watches sector has faced headwinds due to fluctuating gold prices, changing consumer demand, and macroeconomic uncertainties. Kalyan Jewellers, as a prominent player, is not immune to these pressures. The stock’s underperformance by 2.79% relative to its sector on the latest trading day highlights company-specific challenges that may include margin pressures or inventory concerns.

Investors are increasingly using options to manage risk, with put options serving as a popular tool to hedge against potential declines or to capitalise on bearish expectations. The concentration of put activity in Kalyan Jewellers underscores the market’s cautious stance on the stock’s near-term prospects.

Investor Implications and Outlook

For investors currently holding Kalyan Jewellers shares, the heavy put option activity signals a need for caution. The stock’s technical weakness and declining investor participation suggest that downside risks remain elevated in the near term. Using put options as a hedge could be prudent to protect portfolios against further losses.

Conversely, for traders with a bearish outlook, the active put option market offers opportunities to capitalise on expected declines, especially with the strike price close to current levels. However, the recent upgrade to a 'Hold' rating by analysts indicates that a turnaround is not ruled out, and investors should monitor upcoming quarterly results and sector developments closely.

Overall, the options market activity provides a valuable barometer of sentiment, highlighting the balance between hedging needs and speculative positioning in Kalyan Jewellers amid a challenging market environment.

Conclusion

Kalyan Jewellers India Ltd’s prominence in put option trading underscores the prevailing bearish sentiment and risk aversion among investors. The concentration of activity at the ₹470 strike price with expiry on 27 January 2026 reflects expectations of further downside or the desire to hedge existing positions. While the stock has seen a recent upgrade in analyst rating to 'Hold', technical indicators and sectoral pressures suggest caution is warranted. Investors should closely monitor price action, option market trends, and fundamental developments to navigate the evolving landscape effectively.

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