Multi Commodity Exchange Sees Heavy Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Highlights Bearish Sentiment

On 26 February 2026, MCX emerged as the most active stock in put options trading, with 1,468 contracts exchanged at the 2400 strike price. This activity generated a substantial turnover of ₹921.35 lakhs, underscoring significant investor interest in downside protection or speculative bearish bets. The open interest stood at 1,353 contracts, indicating sustained positions rather than transient trades.

The underlying stock price hovered around ₹2405, just above the put strike price, suggesting that traders are positioning for a potential decline or increased volatility in the near term. The expiry date of 30 March 2026 provides a medium-term horizon for these options, allowing investors to hedge or speculate on market movements over the coming month.

Stock Performance and Market Context

MCX’s share price underperformed its sector by 2.57% on the day, closing near an intraday low of ₹2377.5, down 2.93%. The weighted average price of traded shares was closer to this low, indicating selling pressure. Despite this, the stock remains above its 5-day, 50-day, 100-day, and 200-day moving averages, though it is trading below the 20-day moving average, signalling short-term weakness amid longer-term support.

Investor participation has been rising, with delivery volumes reaching 12.68 lakh shares on 25 February, an 18.39% increase over the five-day average. This heightened activity suggests that market participants are actively adjusting their positions, possibly in response to broader capital markets volatility or company-specific developments.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹13.34 crore, ensuring that option and equity trades can be executed efficiently without significant market impact.

Mojo Score Upgrade Reflects Positive Long-Term Outlook Despite Near-Term Pressure

MarketsMOJO’s latest assessment upgraded MCX’s Mojo Grade from Buy to Strong Buy on 18 November 2025, reflecting an improved fundamental outlook. The company holds a robust Mojo Score of 82.0, indicating strong financial health, quality of earnings, and growth prospects within the capital markets sector.

Despite the recent short-term price weakness and increased put option activity, the upgrade suggests that the stock remains attractive for long-term investors. The market capitalisation stands at ₹62,458 crore, categorising MCX as a mid-cap stock with significant institutional interest and stable market positioning.

Put Option Activity as a Hedging and Sentiment Indicator

The concentration of put option trades at the 2400 strike price, close to the current market price, is a classic sign of investors seeking downside protection. This could be driven by concerns over sector-specific risks, regulatory developments, or broader macroeconomic uncertainties impacting capital markets.

Put options serve both as insurance against price declines and as speculative instruments betting on a fall. The sizeable open interest and turnover in these contracts suggest that market participants are actively hedging existing long positions or positioning for a correction.

Given the expiry date at the end of March, traders are likely anticipating near-term catalysts that could influence MCX’s share price, such as quarterly earnings, policy announcements, or shifts in commodity market dynamics.

Comparative Sector and Market Performance

MCX’s 1-day return of -1.63% contrasts with a modest sector gain of 0.35% and a Sensex increase of 0.24%, highlighting relative underperformance. This divergence may be contributing to the increased bearish sentiment reflected in option markets.

Investors should weigh this short-term weakness against the company’s strong fundamentals and upgraded rating. The stock’s technical indicators, including its position relative to moving averages, suggest a mixed picture that warrants close monitoring.

Investor Implications and Outlook

For investors, the surge in put option activity at MCX signals a cautious stance in the near term. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the current option market dynamics as an opportunity to capitalise on expected volatility or price corrections.

Long-term investors should balance these signals against the company’s strong fundamentals and recent upgrade. The capital markets sector remains sensitive to regulatory changes and macroeconomic factors, so ongoing monitoring of news flow and technical indicators is advisable.

Overall, MCX’s option market activity provides valuable insight into investor sentiment, highlighting a nuanced picture of hedging and speculative positioning that complements traditional equity analysis.

Technical and Fundamental Summary

MCX’s share price is currently trading near key support levels, with the 2400 strike price acting as a psychological and technical benchmark. The stock’s liquidity and rising delivery volumes support active trading and investor engagement. Meanwhile, the Mojo Score upgrade to Strong Buy reinforces confidence in the company’s growth trajectory and financial stability.

Investors should consider both the technical signals from option markets and the fundamental backdrop when making portfolio decisions related to MCX.

Conclusion

The pronounced increase in put option trading at Multi Commodity Exchange of India Ltd reflects a growing bearish sentiment and hedging activity among market participants. While the stock faces short-term pressure and relative underperformance, its strong fundamental rating and market position suggest resilience over the medium to long term. Investors are advised to monitor option market trends alongside traditional equity metrics to navigate the evolving risk landscape effectively.

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