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

Put Option Surge Highlights Bearish Positioning

On 30 January 2026, MCX recorded the most active put option contracts among capital markets stocks, with 2,007 contracts traded at the 2,600 strike price expiring on 24 February 2026. This activity generated a turnover of approximately ₹1504.37 lakhs, underscoring substantial investor interest in downside protection or speculative bearish bets. Open interest at this strike stands at 1,330 contracts, indicating sustained interest beyond intraday trading.

The underlying stock price hovered near ₹2,603, just above the put strike price, suggesting that traders are positioning for a potential decline or increased volatility in the near term. The weighted average price of traded options skewed closer to the day’s low, reinforcing the bearish tone.

Stock Performance and Market Context

MCX’s share price declined by 4.07% on the day, underperforming its sector by 3.15% and the Sensex by 3.59%. The stock touched an intraday low of ₹2,557, marking a 4.8% drop from the previous close. This reversal came after three consecutive days of gains, signalling a potential short-term trend change. Despite this, MCX remains above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, reflecting a longer-term uptrend.

Investor participation has notably increased, with delivery volumes rising 33.3% to 26.74 lakh shares on 29 January compared to the five-day average. Liquidity remains robust, with the stock’s traded value supporting sizeable trade sizes up to ₹28.14 crore, facilitating active options and equity market activity.

Fundamental Strengths Amidst Market Volatility

MCX is classified as a mid-cap company with a market capitalisation of ₹68,604 crore. The company operates within the capital markets sector, a space that has seen mixed investor sentiment due to macroeconomic uncertainties and regulatory developments. However, MCX’s Mojo Score of 82.0 and an upgraded Mojo Grade to Strong Buy as of 18 November 2025 reflect solid fundamentals and growth prospects.

The upgrade from a Buy rating underscores improved financial metrics and quality grades, positioning MCX favourably relative to peers. This fundamental strength contrasts with the recent bearish option activity, suggesting that some investors may be hedging existing long positions or speculating on short-term corrections rather than a fundamental deterioration.

Expiry Patterns and Strike Price Significance

The 24 February 2026 expiry date is the nearest monthly expiry, often a focal point for options traders to adjust or close positions. The concentration of put contracts at the ₹2,600 strike price, which is marginally below the current market price, indicates a key support level where traders expect the stock could face downward pressure.

Open interest data suggests that this strike price is a critical zone for hedging strategies, with investors possibly protecting gains from recent rallies or speculating on a pullback. The volume and turnover figures for these puts are among the highest in the capital markets sector, highlighting MCX as a focal point for bearish sentiment in the options market.

Implications for Investors and Traders

For investors, the surge in put option activity may signal caution, prompting a review of portfolio exposure to MCX. While the company’s fundamentals remain strong, the technical signals and options market positioning suggest potential near-term volatility. Traders might consider this an opportunity to hedge or initiate short-term bearish trades, especially given the stock’s recent underperformance relative to sector and benchmark indices.

Conversely, long-term investors may view the current dip and elevated put activity as a temporary correction within an overall positive trend, supported by the stock’s position above key moving averages and a strong Mojo Grade. Monitoring open interest and volume trends in the coming weeks will be crucial to gauge whether bearish sentiment intensifies or dissipates ahead of the February expiry.

Sector and Market Comparison

MCX’s 1-day return of -3.61% notably lags the capital markets sector’s decline of -0.74% and the Sensex’s modest fall of -0.48%. This relative underperformance highlights the stock’s vulnerability to sector-specific and company-specific factors. The capital markets sector has been navigating regulatory scrutiny and fluctuating volumes, which may be contributing to the cautious stance reflected in options trading.

Despite this, MCX’s mid-cap status and strong market capitalisation provide it with resilience and investor interest. The company’s ability to maintain trading volumes and liquidity supports active participation from institutional and retail investors alike, which is evident in the elevated delivery volumes and option turnover.

Outlook and Strategic Considerations

Looking ahead, the options market activity around MCX suggests that investors are bracing for potential volatility or a correction in the short term. The 2,600 strike price put options expiring in late February will be a key indicator to watch, as shifts in open interest and volume could signal changes in market sentiment.

Investors should balance the company’s strong fundamental backdrop, as indicated by the Mojo Score and upgraded rating, against the technical signals and market positioning. Those with exposure to MCX may consider protective strategies or closely monitor price action and options data to manage risk effectively.

Overall, the interplay between robust fundamentals and cautious market positioning creates a nuanced investment landscape for MCX, requiring careful analysis and timely decision-making.

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