Kalyan Jewellers Sees Heavy Put Option Activity Amid Mixed Technical Signals

Put Option Activity Highlights

The most active put options for Kalyan Jewellers (underlying symbol: KALYANKJIL) are concentrated at the ₹400 strike price, with 4,215 contracts traded recently. This represents a substantial turnover of approximately ₹55.22 crores, reflecting significant investor interest in downside protection or speculative bearish bets. Open interest at this strike stands at 789 contracts, indicating a sizeable outstanding position that could influence price dynamics as expiry approaches.

The underlying stock closed at ₹418.25, hovering just above the ₹400 strike, which is a critical psychological and technical level. The concentration of put options at this strike suggests that market participants are positioning for potential downside risk or are hedging existing long exposures in anticipation of volatility.

Stock Performance and Market Context

Kalyan Jewellers has outperformed its sector by 7.83% today, with a one-day return of 9.88% compared to the sector’s 2.33% and the Sensex’s modest 0.59%. The stock has gained for two consecutive days, delivering an 11.15% return over this period. It opened with a gap up of 6.51% and touched an intraday high of ₹424.70, marking an 11.69% increase from the previous close.

Despite this strong short-term momentum, the weighted average price of traded volumes skewed closer to the day’s low, hinting at some selling pressure or profit-taking at elevated levels. The stock’s price currently trades above its 5-day and 20-day moving averages but remains below the 50-day, 100-day, and 200-day averages, suggesting that while short-term momentum is positive, longer-term trends remain cautious.

The broader Diamond & Gold Jewellery sector has gained 2.12% today, indicating a generally favourable environment for the industry. However, falling investor participation, as evidenced by a 22.83% decline in delivery volume compared to the five-day average, points to some hesitation among market participants to commit to longer-term positions.

Fundamental and Market Sentiment Analysis

Kalyan Jewellers holds a Market Capitalisation of ₹43,475 crores, categorising it as a mid-cap stock within the Gems, Jewellery and Watches industry. The company’s Mojo Score stands at 53.0, with a Mojo Grade upgraded from Sell to Hold on 19 January 2026, reflecting a cautious improvement in fundamentals and market outlook. The Market Cap Grade is rated 2, indicating moderate size and liquidity.

The recent upgrade in rating suggests that analysts see some stabilisation or recovery potential, but the Hold grade implies that investors should remain vigilant given prevailing uncertainties. The surge in put option activity may be a manifestation of this cautious stance, with traders seeking to hedge against potential downside risks amid volatile market conditions.

Expiry Patterns and Investor Positioning

The 24 February 2026 expiry date is attracting the bulk of put option activity, which is typical as traders adjust their positions ahead of contract settlement. The concentration of puts at ₹400 strike price, slightly below the current market price, suggests a protective stance by investors who may be anticipating a pullback or increased volatility in the near term.

Open interest data reveals that while a significant number of contracts have been traded, the outstanding positions remain moderate, indicating that some of the activity could be speculative rather than purely hedging. This dynamic often precedes heightened price swings as expiry approaches, with traders either unwinding positions or rolling them forward.

Technical Indicators and Liquidity Considerations

Technically, Kalyan Jewellers’ price action shows a mixed picture. The stock’s position above short-term moving averages signals positive momentum, but resistance at longer-term averages may cap upside potential. The liquidity profile supports trading volumes up to ₹3.88 crores comfortably, ensuring that option and stock trades can be executed without significant market impact.

However, the decline in delivery volumes suggests that while trading activity is robust, genuine investor conviction may be waning. This divergence between price gains and delivery participation often precedes corrections or consolidation phases.

Implications for Investors and Traders

The heightened put option activity in Kalyan Jewellers signals a cautious market stance despite recent gains. Investors should interpret this as a sign of potential volatility or downside risk in the near term. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate risk.

Conversely, traders with a bearish outlook might view the current option volumes as an opportunity to capitalise on expected price corrections. However, given the stock’s recent momentum and sectoral tailwinds, any bearish bets should be balanced with awareness of possible short-term rallies.

Sectoral and Broader Market Context

The Gems, Jewellery and Watches sector has shown resilience with a 2.12% gain today, supported by improving consumer demand and festive season optimism. Kalyan Jewellers’ outperformance relative to its sector peers highlights its market leadership but also exposes it to sharper corrections if broader market sentiment shifts.

Investors should monitor macroeconomic indicators, gold price trends, and consumer spending patterns closely, as these factors heavily influence jewellery stocks. The interplay between these variables and derivatives market positioning will be critical in shaping Kalyan Jewellers’ price trajectory in the coming weeks.

Conclusion

Kalyan Jewellers India Ltd’s recent surge in put option trading ahead of the 24 February expiry reflects a complex investor sentiment landscape. While the stock has demonstrated strong short-term gains and outperformed its sector, the elevated put volumes at the ₹400 strike price suggest hedging against potential downside or speculative bearish positioning.

With a Hold rating and a Mojo Score of 53.0, the company remains a cautious pick for investors. Market participants should weigh the positive momentum against the risks implied by derivatives activity and declining delivery volumes. Strategic hedging and vigilant monitoring of technical and fundamental indicators will be essential for navigating the stock’s near-term outlook.

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