Multi Commodity Exchange Sees Surge in Put Option Activity Amid Bearish Hedging

Robust Put Option Volumes Highlight Investor Caution

On 19 February 2026, MCX emerged as the most active stock in put options trading, with 5,125 contracts changing hands at the ₹2,400 strike price expiring on 24 February. This volume translated into a turnover of approximately ₹1,286.05 lakhs, underscoring significant investor interest in downside protection or speculative bearish bets. Open interest for these puts stands at 1,553 contracts, indicating sustained positioning rather than transient trading.

The underlying stock price was ₹2,412.90 at the time, marginally above the put strike price, suggesting that traders are positioning for a potential near-term correction or volatility. The put option activity is particularly noteworthy given MCX’s recent price momentum and technical strength.

Price Performance and Technical Strength

MCX has outperformed its sector by 3.58% on the day, with a 3.29% gain compared to the Capital Markets sector’s decline of 0.32% and the broader Sensex’s fall of 0.36%. The stock has recorded consecutive gains over the past two sessions, delivering a cumulative return of 5.92%. It opened with a gap-up of 2.55% and touched an intraday high of ₹2,436, marking a 4.04% rise.

Technically, MCX is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a strong uptrend. This technical backdrop contrasts with the surge in put option activity, suggesting that investors may be hedging long positions or anticipating short-term volatility despite the bullish trend.

Investor Participation and Liquidity Considerations

Despite the strong price gains, investor participation has shown signs of moderation. Delivery volume on 18 February was 16.87 lakhs, down 2.19% against the five-day average delivery volume. This decline in delivery volume may indicate reduced conviction among some investors or a shift towards short-term trading strategies.

Liquidity remains robust, with the stock’s traded value comfortably supporting trade sizes up to ₹18.28 crores based on 2% of the five-day average traded value. This liquidity profile supports active options trading and allows institutional players to execute sizeable hedging strategies efficiently.

Mojo Score Upgrade Reflects Strong Buy Sentiment

MarketsMOJO has upgraded MCX’s Mojo Grade from Buy to Strong Buy as of 18 November 2025, reflecting improved fundamentals and technical outlook. The stock’s Mojo Score stands at 82.0, signalling strong momentum and quality metrics. Despite a Market Cap Grade of 2, indicating mid-cap status with moderate size, MCX’s market capitalisation is substantial at ₹61,705 crores, positioning it as a key player in the Capital Markets sector.

This upgrade aligns with the stock’s recent price strength and technical resilience, although the elevated put option activity suggests that some investors are adopting a cautious stance or hedging against potential near-term downside risks.

Expiry Patterns and Strike Price Concentration

The concentration of put option activity at the ₹2,400 strike price for the 24 February expiry is significant. This strike is close to the current market price, making it a critical level for traders to watch. The open interest of 1,553 contracts at this strike indicates that many investors are either buying protection or speculating on a pullback to this level.

Such positioning often precedes volatility around expiry dates, as traders adjust or unwind positions. The expiry week could see increased price swings as these options approach maturity, with the ₹2,400 level acting as a potential support or pivot point.

Balancing Bullish Momentum with Bearish Hedging

The juxtaposition of MCX’s strong price performance and the surge in put option volumes highlights a nuanced market sentiment. While technical indicators and recent gains suggest bullish momentum, the elevated put activity points to hedging strategies or speculative bearish bets. This duality is common in mid-cap stocks where volatility can be pronounced and investors seek to manage risk carefully.

Investors should monitor the stock’s price action closely around the ₹2,400 level and expiry date. A sustained move above this strike could diminish put option pressure, while a dip below may trigger further downside hedging or selling pressure. The stock’s liquidity and active options market provide ample opportunity for tactical positioning.

Sector and Market Context

Within the Capital Markets sector, MCX’s outperformance is notable given the broader market’s subdued tone. The Sensex’s marginal decline of 0.36% contrasts with MCX’s 3.29% gain, underscoring the stock’s relative strength. This divergence may attract further investor interest, although the cautious options positioning suggests some market participants remain vigilant.

Overall, MCX’s combination of strong fundamentals, upgraded Mojo Grade, and active options market make it a key stock to watch in the near term, especially as expiry approaches and volatility potentially increases.

Outlook for Investors

For investors, the current environment calls for a balanced approach. Those holding long positions may consider protective put options to mitigate downside risk, while traders might exploit the heightened volatility around expiry for tactical trades. The stock’s strong technical setup supports a positive medium-term outlook, but near-term price fluctuations are likely as option expiry dynamics unfold.

Given the upgraded Mojo Grade and robust market cap, MCX remains a compelling mid-cap stock within the Capital Markets sector. However, the surge in put option activity serves as a reminder to manage risk prudently and stay alert to changing market conditions.

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