Multi Commodity Exchange Sees Surge in Put Option Activity Ahead of Year-End Expiry

Heavy Put Option Volumes Highlight Investor Caution

On 30 December 2025 expiry, MCX saw substantial put option volumes across key strike prices, with the 10,800 strike leading the pack at 2,729 contracts traded, followed closely by the 10,900 strike with 2,177 contracts and the 10,700 strike at 2,137 contracts. The turnover for these strikes was significant, with ₹79.79 lakhs at 10,800, ₹145.61 lakhs at 10,900, and ₹23.32 lakhs at 10,700, reflecting active hedging and speculative strategies.

Open interest figures further underscore this trend, with 1,242 contracts open at the 10,800 strike, 1,120 at 10,700, and 815 at 10,900. These numbers indicate that traders are positioning for potential downside or protecting existing long positions as the underlying MCX stock price hovers at ₹10,897, just 2.87% shy of its 52-week high of ₹11,219.

Price Action and Technical Context

MCX has experienced a mild correction over the past two sessions, falling by 1.32% cumulatively, slightly underperforming the capital markets sector’s 0.21% decline and the Sensex’s marginal 0.08% drop on the same day. Despite this, the stock remains robustly positioned above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a strong underlying trend.

However, investor participation appears to be waning, with delivery volumes on 29 December falling by 18.51% to 1.28 lakh shares compared to the five-day average. This decline in delivery volume suggests some hesitation among long-term holders, possibly prompting increased use of put options as a protective measure.

Market Cap and Mojo Score Insights

MCX is classified as a mid-cap stock with a market capitalisation of ₹55,781 crore. Its Mojo Score currently stands at 77.0, reflecting a 'Buy' grade, a slight downgrade from a previous 'Strong Buy' rating assigned on 18 November 2025. The downgrade may be attributed to the recent price softness and increased bearish option activity, signalling a more cautious outlook from analysts.

Expiry Patterns and Investor Strategies

The concentration of put option activity at strikes slightly below the current market price suggests investors are hedging against a potential pullback or volatility spike as the year-end approaches. The 30 December expiry date is critical, with traders likely adjusting positions ahead of the new calendar year.

Open interest data reveals that while the 10,800 strike has the highest open interest, the 10,700 and 10,900 strikes also maintain substantial open interest, indicating a broad range of bearish bets or protective hedges. This pattern is typical in a market where investors seek to balance risk amid uncertain macroeconomic or sector-specific developments.

Sector and Market Comparison

Within the capital markets sector, MCX’s performance and option activity stand out. While the sector has seen modest declines, MCX’s relative strength above key moving averages contrasts with the cautious positioning in its options market. This divergence may reflect differing views between equity holders and derivatives traders, with the latter anticipating near-term volatility or correction.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transaction sizes up to ₹10.88 crore based on 2% of the five-day average. This liquidity facilitates active options trading and allows institutional players to implement complex hedging strategies efficiently.

Implications for Investors and Traders

The surge in put option volumes at MCX signals a cautious stance among market participants, with many likely using these instruments to hedge existing long positions or speculate on a near-term correction. Investors should weigh this bearish positioning against the stock’s strong technical backdrop and solid fundamentals reflected in its Mojo Score and market cap.

Given the stock’s proximity to its 52-week high and recent minor declines, traders might consider monitoring option open interest and volume trends closely for signs of shifting sentiment. The expiry on 30 December 2025 will be a key event to watch, as it may set the tone for MCX’s price trajectory in early 2026.

Overall, while the put option activity suggests caution, the underlying strength in moving averages and sector-relative performance indicates that MCX remains a stock of interest for both hedgers and growth-oriented investors in the capital markets space.

Outlook and Analyst Commentary

Analysts tracking MCX have recently adjusted their ratings, with the Mojo Grade moving from 'Strong Buy' to 'Buy' as of 18 November 2025. This reflects a tempered optimism, acknowledging the stock’s robust fundamentals but recognising the increased risk signalled by option market dynamics and short-term price softness.

Investors should consider these factors in the context of broader market conditions and sector trends, particularly as the capital markets sector navigates evolving regulatory and economic environments. The balance between technical strength and option market caution will be pivotal in shaping MCX’s near-term performance.

Summary

In summary, Multi Commodity Exchange of India Ltd is currently experiencing heightened put option activity, indicative of increased bearish sentiment or hedging ahead of the year-end expiry. Despite this, the stock maintains strong technical positioning and a favourable Mojo Score, suggesting that while caution is warranted, the underlying fundamentals remain intact. Investors and traders should closely monitor option volumes, open interest, and price action in the coming days to gauge the evolving market sentiment.

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