Multi Commodity Exchange Sees Surge in Put Option Activity Amid Bullish Price Momentum

Robust Price Gains Contrasted by Elevated Put Option Interest

MCX has been on a notable upward trajectory, hitting a new 52-week high of ₹2,605 on 28 January 2026, representing a 7.73% intraday gain. The stock outperformed its sector by 3.7% and the broader Sensex by 4.94% on the day, closing with a 5.46% gain. This rally follows two consecutive days of gains, cumulatively delivering an 11.7% return over that period. The stock opened with a gap up of 2.89%, and trading volumes have surged, with delivery volumes rising 26.66% against the five-day average, indicating strong investor participation.

Technically, MCX is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – reinforcing the bullish momentum. The market cap stands at a robust ₹65,022.92 crores, categorising it as a mid-cap stock with ample liquidity to support sizeable trades, with an average daily traded value sufficient for Rs 21.98 crore trade sizes.

Put Option Activity Highlights Bearish Hedging and Strategic Positioning

Despite the bullish price action, the options market reveals a contrasting narrative. The most active put options for MCX are clustered around strike prices of ₹2,300, ₹2,400, and ₹2,500, all expiring on 24 February 2026. These strikes are notably below and near the current underlying value of ₹2,543, suggesting investors are positioning for potential downside or hedging existing long exposures.

Specifically, the ₹2,500 strike put option recorded the highest number of contracts traded at 1,777, generating a turnover of ₹961.58 lakhs with an open interest of 530 contracts. The ₹2,400 strike saw 1,784 contracts traded with a turnover of ₹589.95 lakhs and open interest of 929, while the ₹2,300 strike had 1,689 contracts traded, turnover of ₹323.23 lakhs, and open interest of 1,280 contracts. The substantial open interest at the ₹2,300 strike indicates significant outstanding bearish bets or protective hedges at this lower level.

The elevated put option volumes and open interest at these strikes, especially with expiry less than a month away, suggest that market participants are either anticipating a correction or are actively managing risk amid the recent sharp gains. This dynamic is typical in capital markets where investors seek downside protection through put options while maintaining bullish exposure in the underlying stock.

Mojo Score Upgrade Reflects Strong Buy Sentiment

Reflecting the positive fundamentals and technical strength, MarketsMOJO has upgraded MCX’s Mojo Grade from Buy to Strong Buy as of 18 November 2025, with a high Mojo Score of 82.0. This upgrade underscores improved quality metrics and trend assessments, signalling confidence in the stock’s medium-term prospects. The market cap grade remains at 2, indicating a solid mid-cap status with good liquidity and institutional interest.

Investors should note that while the stock’s fundamentals and technicals are robust, the active put option interest highlights the importance of monitoring volatility and risk management strategies. The put-heavy activity may also reflect cautious sentiment among traders who are hedging against potential short-term pullbacks amid the recent sharp rally.

Expiry Patterns and Implications for Investors

The 24 February 2026 expiry date is attracting significant open interest and turnover in put options, suggesting that market participants are positioning ahead of this key date. The clustering of put strikes below the current price level indicates a protective stance, possibly anticipating profit booking or volatility spikes in the near term. This expiry window will be critical to watch for shifts in sentiment and price action.

Given the stock’s recent outperformance relative to the sector and Sensex, the put option activity may also be driven by institutional investors seeking to hedge large positions or by traders speculating on a short-term correction. The weighted average price data shows more volume traded closer to the low price of the day, which could indicate cautious accumulation or profit-taking at elevated levels.

Investor Takeaways: Balancing Bullish Momentum with Risk Management

For investors, the current scenario presents a nuanced picture. The strong price momentum and upgraded rating support a bullish medium-term outlook for MCX. However, the heavy put option activity at strikes below the current market price signals that market participants are actively managing downside risk. This duality suggests that while confidence in the stock remains high, prudent investors should consider protective strategies such as stop-loss orders or option hedges to safeguard gains.

Moreover, the liquidity profile and rising delivery volumes indicate that MCX remains a preferred stock for both institutional and retail investors, providing ample scope for strategic entry and exit points. Monitoring the options market alongside price action can offer valuable insights into evolving market sentiment and potential volatility ahead of the February expiry.

In summary, Multi Commodity Exchange of India Ltd stands at a critical juncture where bullish fundamentals and technical strength coexist with cautious positioning in the derivatives market. This dynamic environment calls for a balanced approach, combining conviction in the stock’s growth prospects with vigilant risk management.

Sector and Market Context

Within the Capital Markets sector, MCX’s outperformance is notable, with a 1-day sector return of 1.71% and Sensex return of 0.52% on the same day. This relative strength highlights MCX’s leadership among peers and its ability to attract investor interest amid broader market fluctuations. The company’s role as a key commodity exchange operator further underpins its strategic importance and growth potential in India’s evolving financial ecosystem.

Conclusion

MCX’s recent price surge, combined with significant put option activity, paints a picture of a stock that is both favoured by investors and carefully hedged against potential volatility. The upgraded Mojo Grade to Strong Buy reinforces the positive outlook, yet the options market signals caution. Investors should weigh these factors carefully, leveraging detailed research and market data to make informed decisions as the 24 February expiry approaches.

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