Put Option Activity Highlights
The most active put options for Larsen & Toubro are concentrated around the strike prices of ₹4,220 and ₹4,260, both expiring on 24 February 2026. The ₹4,260 strike saw the highest number of contracts traded, with 3,706 contracts exchanging hands, generating a turnover of ₹111.62 lakhs and an open interest of 2,326 contracts. Meanwhile, the ₹4,220 strike recorded 3,031 contracts traded, turnover of ₹29.60 lakhs, and an open interest of 1,412 contracts.
These figures indicate a pronounced interest in downside protection or speculative bearish bets just below the current underlying value of ₹4,302.10. The concentration of open interest at these strikes suggests that market participants are actively hedging against potential declines or positioning for a pullback in the near term.
Stock Price and Technical Context
Larsen & Toubro’s stock price is currently trading just 0.79% below its 52-week high of ₹4,335, signalling strong underlying momentum. The stock has traded within a narrow range of ₹35.9 today, reflecting some consolidation after three consecutive days of gains. Despite a minor decline of 0.51% on the day, LT’s performance remains broadly in line with the construction sector, which fell 0.54%, and outperformed the Sensex’s modest 0.13% drop.
Technically, LT is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a sustained uptrend. However, falling investor participation, as evidenced by a 7.83% decline in delivery volume to 14.38 lakh shares on 18 February compared to the five-day average, hints at some caution among shareholders.
Mojo Score Upgrade and Market Capitalisation
On 17 February 2026, Larsen & Toubro’s mojo grade was upgraded from Hold to Buy, reflecting improved fundamentals and positive outlook. The company holds a mojo score of 75.0, indicating strong quality and growth prospects. Its market capitalisation stands at a robust ₹5,94,931 crore, classifying it firmly as a large-cap stock within the construction sector.
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Interpreting the Put Option Interest
The surge in put option volumes at strikes slightly below the current market price suggests a nuanced market stance. On one hand, the elevated open interest and turnover at ₹4,260 and ₹4,220 strikes may indicate hedging activity by institutional investors seeking to protect gains amid recent price strength. On the other hand, speculative traders might be positioning for a short-term correction given the stock’s recent narrow trading range and slight pullback.
Put options serve as insurance against downside risk or as vehicles for bearish bets. The fact that these strikes are close to the current price level implies that traders are focused on a potential dip in the coming week, coinciding with the expiry date. This pattern is typical in large-cap stocks where volatility is expected around key expiry dates.
Sector and Market Comparison
Within the construction sector, Larsen & Toubro remains a bellwether stock, and its option market activity often reflects broader sector sentiment. The sector’s 0.54% decline today, slightly worse than LT’s 0.51% drop, suggests that LT’s relative resilience is being tested. The Sensex’s smaller decline of 0.13% indicates that the broader market is holding up better, but LT’s put option interest signals some caution among traders about near-term risks specific to the construction space.
Investors should also note the stock’s liquidity profile, which supports sizeable trades up to ₹17.38 crore based on 2% of the five-day average traded value. This liquidity ensures that option market movements are meaningful and not distorted by thin trading.
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Investor Implications and Outlook
For investors, the current put option activity in Larsen & Toubro suggests a cautious stance despite the stock’s strong technical positioning and mojo upgrade. The proximity of put strikes to the current price and the high open interest imply that downside risk is being actively managed or anticipated.
Long-term investors may view this as a prudent hedging phase amid a broader uptrend, while short-term traders should be alert to potential volatility around the 24 February expiry. The stock’s ability to hold above key moving averages will be critical in determining whether the recent dip is a temporary consolidation or the start of a deeper correction.
Given the company’s large-cap status, strong market capitalisation, and sector leadership, any pullback could present a buying opportunity for investors aligned with the construction sector’s growth prospects. However, monitoring option market trends and delivery volumes will remain essential to gauge evolving market sentiment.
Summary
Larsen & Toubro Ltd. is currently at a crossroads with heavy put option activity signalling increased hedging and bearish positioning ahead of the February expiry. While the stock trades near its 52-week high and enjoys a mojo upgrade to Buy, the option market suggests investors are preparing for possible near-term volatility. The interplay of strong fundamentals, technical strength, and cautious option positioning makes LT a stock to watch closely in the coming days.
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