Kalyan Jewellers Sees Heavy Put Option Activity Amid Prolonged Downtrend

Intense Put Option Trading Signals Bearish Positioning

The most active put option for Kalyan Jewellers is the 430 strike expiring on 27 January 2026, where 6,118 contracts changed hands, generating a turnover of ₹675.73 lakhs. This volume is substantial given the stock’s current underlying value of ₹424.25, indicating that traders are positioning for further downside or seeking protection against continued declines. Open interest at this strike stands at 1,608 contracts, underscoring sustained interest in downside exposure.

Such heavy put option activity often suggests that market participants are either speculating on a drop below the 430 level or hedging existing long positions amid heightened uncertainty. The weighted average price of traded options clustered near the day’s low further confirms a bearish bias, as investors are willing to pay premiums for downside protection.

Stock Performance Reflects Sector Underperformance and Weak Technicals

Kalyan Jewellers has underperformed its sector by 5.21% on the day, with a one-day return of -5.56% compared to the sector’s modest gain of 0.49%. The stock has been on a steady decline for nine consecutive sessions, losing 17.37% over this period. Intraday lows touched ₹429.20, close to the critical 430 strike price attracting put option interest.

Technically, the stock is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish trend. This technical weakness is compounded by falling investor participation; delivery volumes on 20 January dropped by 30.07% against the five-day average, indicating waning conviction among buyers. Despite this, liquidity remains adequate, with a trade size capacity of ₹5.72 crores based on 2% of the five-day average traded value, allowing for efficient execution of large trades.

Mojo Score Downgrade Reflects Deteriorating Fundamentals

Kalyan Jewellers carries a Mojo Score of 44.0, categorised as a Sell rating, downgraded from Hold on 19 January 2026. This downgrade reflects deteriorating fundamentals and technicals, signalling caution for investors. The company’s market capitalisation stands at ₹46,780 crores, placing it in the mid-cap segment with a Market Cap Grade of 2, indicating moderate size but limited strength relative to larger peers.

Such a downgrade often influences investor sentiment negatively, potentially exacerbating selling pressure and contributing to increased put option activity as traders seek to capitalise on or hedge against further declines.

Expiry Patterns and Strike Price Concentration

The concentration of put option volume at the 430 strike price, just above the current market price, suggests a critical support level that traders are watching closely. The expiry date of 27 January 2026 is imminent, which typically leads to heightened volatility as positions are squared off or rolled over. The open interest data indicates that many traders are maintaining bearish bets or protective hedges through this expiry, anticipating continued weakness or a potential breakdown below this level.

Such patterns are consistent with a market environment where uncertainty prevails, and investors are cautious about near-term catalysts that could further pressure the stock.

Sectoral Context and Broader Market Comparison

The gems, jewellery and watches sector has faced headwinds recently due to fluctuating gold prices, consumer demand concerns, and macroeconomic uncertainties. Kalyan Jewellers’ underperformance relative to its sector peers highlights company-specific challenges, possibly linked to earnings outlook or competitive pressures.

Compared to the Sensex, which declined marginally by 0.08% on the same day, Kalyan Jewellers’ sharper fall and heavy put option interest underscore its vulnerability. Investors should weigh these factors carefully when considering exposure to this stock or the sector at large.

Investor Implications and Outlook

For investors, the surge in put option activity at the 430 strike price ahead of the 27 January expiry is a clear signal to reassess risk exposure. The stock’s technical weakness, combined with a negative Mojo Grade and falling delivery volumes, suggests that downside risks remain elevated in the near term.

Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate potential losses. Conversely, traders with a bearish outlook might view the current environment as an opportunity to initiate short positions or purchase puts to capitalise on expected declines.

However, given the stock’s liquidity and market cap, large institutional moves could influence price action significantly, warranting close monitoring of open interest and volume trends in the coming sessions.

Conclusion

Kalyan Jewellers India Ltd is currently navigating a challenging phase marked by sustained price weakness and heightened bearish sentiment as evidenced by heavy put option trading. The 430 strike price for the 27 January expiry has emerged as a focal point for downside protection and speculative positioning. Investors should remain vigilant to technical signals and fundamental updates, balancing risk management with potential opportunities in this mid-cap jewellery sector stock.

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