Kalyan Jewellers Sees Heavy Put Option Activity Amid Bearish Sentiment

Intense Put Option Trading Highlights Bearish Sentiment

On 23 Jan 2026, Kalyan Jewellers witnessed a remarkable spike in put option volumes, with 2,854 contracts traded at the ₹370 strike price for the expiry due on 27 Jan 2026. This activity generated a turnover of approximately ₹20.96 crores, underscoring significant investor interest in downside protection or speculative bearish bets. The open interest for these puts stands at 1,051 contracts, indicating sustained positioning rather than transient trading.

The underlying stock price was ₹374.25 at the time, hovering just above the ₹370 strike, which suggests that traders are bracing for a potential near-term decline or increased volatility. The put option activity is particularly notable given the stock’s recent technical profile and sector dynamics.

Price Action and Technical Context

Kalyan Jewellers hit a new 52-week low of ₹368.80 on the day, marking a fresh trough in its price trajectory. Despite this, the stock outperformed its sector by 0.4% on the day, registering a modest gain of 0.23% compared to the sector’s decline of 0.23%. This slight rebound follows a prolonged downtrend, with the stock recovering after ten consecutive days of losses.

However, the technical indicators remain bearish. The stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling persistent downward momentum. Such positioning often prompts investors to seek downside protection through put options, which explains the surge in open interest and volumes at the ₹370 strike.

Investor participation has also intensified, with delivery volumes rising to 48.76 lakh shares on 22 Jan 2026, a 33.71% increase over the five-day average. This heightened activity suggests that market participants are actively repositioning their holdings amid uncertainty.

Fundamental and Market Positioning Overview

Kalyan Jewellers India Ltd operates in the Gems, Jewellery and Watches industry, a sector that has faced headwinds due to fluctuating gold prices, changing consumer demand, and macroeconomic uncertainties. The company’s market capitalisation stands at ₹38,601 crores, placing it in the mid-cap category. Despite its size, the stock’s current Mojo Score is 47.0, with a Mojo Grade of Sell, downgraded from Hold as of 19 Jan 2026. This downgrade reflects deteriorating fundamentals or technical outlook as assessed by MarketsMOJO’s proprietary analytics.

The Market Cap Grade is 2, indicating moderate liquidity and market presence, but not enough to shield the stock from volatility. The recent increase in put option activity aligns with this bearish grading, as investors seek to hedge or capitalise on expected downside moves.

Expiry Patterns and Strike Price Concentration

The concentration of put option trades at the ₹370 strike price, just below the current market price, is a critical signal. It suggests that traders are positioning for a potential breach of this support level in the near term. The expiry date of 27 Jan 2026 is imminent, which often leads to heightened option activity as traders adjust positions ahead of expiry.

Open interest data confirms that these are not merely speculative trades but represent genuine hedging or directional bets. The sizeable open interest of 1,051 contracts at this strike price indicates that a significant number of investors are committed to this bearish outlook.

Sector and Broader Market Comparison

While Kalyan Jewellers outperformed its sector marginally on the day, the broader Gems, Jewellery and Watches sector remains under pressure. The Sensex was flat, showing no directional bias, but the sector’s negative return of 0.23% highlights selective weakness. This divergence underscores the stock-specific factors driving Kalyan Jewellers’ option activity rather than a broad market sell-off.

Liquidity metrics further support active trading in Kalyan Jewellers. The stock’s liquidity, based on 2% of the five-day average traded value, supports trade sizes up to ₹13.37 crores, making it accessible for institutional and retail investors alike to execute sizeable option and equity trades.

Investor Implications and Outlook

The heavy put option activity in Kalyan Jewellers signals a cautious or bearish stance among market participants. Investors should note the stock’s technical weakness, recent downgrade to a Sell rating, and the looming expiry of these put contracts. The ₹370 strike price acts as a critical support level; a breach could trigger further downside pressure.

For risk-averse investors, the current environment suggests prudence, with hedging strategies or reduced exposure advisable until clearer signs of recovery emerge. Conversely, speculative traders may view the elevated put volumes as an opportunity to capitalise on potential volatility or downside moves in the short term.

Monitoring open interest changes and price action around the expiry date will be crucial to gauge whether bearish sentiment intensifies or dissipates. Additionally, sectoral trends and gold price movements will continue to influence Kalyan Jewellers’ performance.

Conclusion

Kalyan Jewellers India Ltd’s surge in put option trading at the ₹370 strike price ahead of the 27 Jan 2026 expiry highlights a pronounced bearish sentiment and hedging activity. Despite a slight rebound after a prolonged decline, the stock remains technically weak and has been downgraded to a Sell rating by MarketsMOJO. Investors should carefully analyse these signals in the context of sector dynamics and broader market conditions before making portfolio decisions.

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