Rs 1,580 Puts — Just Above Current Price — Draw 3,702 Contracts on One 97 Communications Ltd

Put Options Event and Cash Market Context

On 18 Aug 2026, One 97 Communications Ltd saw significant put option activity concentrated around four strikes expiring on 25 Aug 2026. The Rs 1,580 strike recorded 3,702 contracts traded with a turnover of approximately ₹89.8 crores and open interest of 1,348 contracts. Nearby strikes at Rs 1,600, Rs 1,560, and Rs 1,500 also showed heavy put volumes, with Rs 1,600 seeing 3,785 contracts traded and Rs 1,560 with 4,018 contracts. The underlying stock price stood at Rs 1,565.50, placing the Rs 1,580 and Rs 1,600 puts slightly out-of-the-money (OTM) and the Rs 1,560 and Rs 1,500 puts in-the-money (ITM) or near-the-money territory.

This activity coincides with a three-day losing streak for the stock, which has declined 5.28% over this period, underperforming its sector by 0.96%. The stock currently trades above its 20-day, 50-day, 100-day, and 200-day moving averages but remains below the 5-day moving average, indicating some short-term weakness amid longer-term support. Delivery volumes have fallen sharply by 71.16% compared to the five-day average, signalling reduced investor participation in the cash market despite the recent price decline — is this divergence between price and volume a warning sign or a temporary pause?

Strike Price Analysis: Moneyness and Distance from Underlying

The Rs 1,580 strike sits just 0.93% above the current price of Rs 1,565.50, making it an at-the-money (ATM) put option. The Rs 1,600 strike is 2.2% above the underlying, also OTM, while the Rs 1,560 strike is 0.32% below the current price, effectively ATM or slightly ITM. The Rs 1,500 strike is 4.3% below the current price, clearly ITM.

The proximity of these strikes to the current price is critical in interpreting the put activity. ATM and slightly OTM puts are often used for hedging existing long positions, protecting against short-term downside risk. ITM puts, especially at Rs 1,500, could indicate more directional bearish bets or part of complex spread strategies. The relatively high turnover at the Rs 1,580 and Rs 1,560 strikes suggests a focus on near-term protection rather than deep bearish speculation.

Interpreting the Put Activity: Hedging, Bearish Positioning, or Put Writing?

Put options inherently carry ambiguous signals. The heavy activity at near-the-money strikes on One 97 Communications Ltd could be interpreted in several ways. First, the stock’s recent 5.28% decline and underperformance might suggest bearish positioning, with traders buying puts to profit from further falls. However, the stock remains above key moving averages, which often serve as technical support, and the put strikes cluster close to the current price, consistent with protective hedging rather than outright bearish bets.

Alternatively, put writing (selling puts) could be at play, especially at the Rs 1,600 strike where open interest is highest at 2,514 contracts. Put sellers collect premium betting the stock will not fall below the strike by expiry, a bullish stance. Yet, the high turnover and open interest at multiple strikes suggest a mix of fresh buying and selling, complicating a single interpretation.

Given the stock’s technical position and recent price action, the most plausible explanation is that the put activity largely reflects hedging by longs seeking protection against short-term volatility — should investors consider similar protective strategies amid the current market dynamics?

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest provides insight into fresh positioning. At the Rs 1,580 strike, 3,702 contracts traded against an open interest of 1,348, a ratio of approximately 2.7:1, indicating significant fresh activity. The Rs 1,600 strike shows 3,785 contracts traded versus 2,514 open interest, a ratio of 1.5:1, suggesting a mix of new trades and existing positions. The Rs 1,560 strike’s ratio is 2.25:1, and Rs 1,500 strike’s ratio is about 2:1, both pointing to fresh interest in these strikes.

This fresh positioning across multiple strikes supports the view that traders are actively adjusting their exposure, likely balancing between hedging and speculative strategies. The relatively balanced open interest and turnover ratios do not strongly indicate aggressive directional bets but rather a nuanced market stance.

Cash Market Context: Moving Averages and Delivery Volumes

One 97 Communications Ltd trades above its 20-day, 50-day, 100-day, and 200-day moving averages, which typically signal underlying strength and support. However, it is below the 5-day moving average, reflecting short-term weakness. This mixed technical picture aligns with the put strikes clustering near current prices, possibly reflecting hedging against a pullback to these support levels rather than a collapse.

Delivery volumes have dropped sharply by 71.16% compared to the five-day average, indicating lower investor participation in the recent decline. This thinning volume may explain why put buyers seek protection: the rally and recent price levels lack strong delivery-backed conviction — does this divergence between price and volume signal a cautious market stance?

Fundamental and Market Capitalisation Context

One 97 Communications Ltd operates in the Financial Technology (Fintech) sector and is classified as a mid-cap company with a market capitalisation of approximately ₹1,00,657.90 crores. The stock’s recent underperformance relative to its sector and the broader Sensex, combined with the put option activity, suggests investors are balancing optimism about the company’s long-term prospects with caution about near-term volatility.

Conclusion: Protective Hedging Dominates Put Activity

The put option activity on One 97 Communications Ltd ahead of the 25 Aug 2026 expiry reveals a complex picture. The concentration of contracts at near-the-money strikes, combined with the stock’s position above key moving averages and recent price decline, points to protective hedging as the dominant interpretation. While some directional bearish bets or put writing may be present, the data suggests that many traders are seeking to guard existing long positions against short-term dips rather than betting on a sharp fall.

Given the mixed signals from price action, volume, and options data, should investors consider hedging strategies to manage risk in this environment? The interplay between put buying and selling, alongside cash market dynamics, underscores the importance of a nuanced approach to interpreting options activity.

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