One 97 Communications Sees Heavy Put Option Activity Amid Bearish Sentiment

Intense Put Option Trading Highlights Bearish Sentiment

On 23 January 2026, One 97 Communications Ltd (PAYTM) emerged as the most active stock in put options trading, with three key strike prices attracting substantial volumes. The 1200 strike price saw the highest number of contracts traded at 10,527, generating a turnover of ₹1,892.75 lakhs. Close behind, the 1120 strike price recorded 9,687 contracts with ₹967.08 lakhs turnover, while the 1160 strike price accounted for 9,144 contracts and ₹1,585.75 lakhs turnover. These figures underscore a pronounced bearish bias, as traders appear to be positioning for a potential downside or hedging existing long exposures.

The open interest data further corroborates this trend, with the 1120 strike price holding the largest open interest of 807 contracts, followed by 474 and 459 contracts at the 1200 and 1160 strikes respectively. Given the underlying stock price of ₹1,179 at the time, these strike prices represent a range slightly below and above the current market level, indicating a strategic spread of put options to manage risk or speculate on declines.

Price Action Reflects Elevated Volatility and Downside Pressure

PAYTM’s stock price exhibited heightened volatility on 23 January, trading within a wide intraday range of ₹169.3, from a low of ₹1,134.5 to a high of ₹1,303.8. Despite touching an intraday high that was 3.44% above the previous close, the stock ultimately underperformed its sector by 6.52% and closed down 7.19% for the day. This underperformance was stark compared to the Financial Technology sector’s modest decline of 0.69% and the Sensex’s marginal fall of 0.23%.

The weighted average price of traded volumes skewed closer to the day’s low, signalling selling pressure and a bearish market consensus. Intraday volatility, calculated at 9.26%, was notably high, reflecting investor uncertainty and rapid price swings. The stock’s position relative to moving averages also paints a cautious picture: while it remains above the 200-day moving average, it trades below the 5-day, 20-day, 50-day, and 100-day averages, suggesting short- to medium-term weakness despite longer-term support.

Declining Investor Participation and Liquidity Considerations

Investor participation has waned, with delivery volumes on 22 January falling by 25.72% compared to the five-day average, registering at 10.17 lakh shares. This decline in delivery volume may indicate reduced conviction among buyers or a shift towards short-term trading strategies rather than long-term accumulation. Nevertheless, liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹8.02 crore comfortably.

Mojo Score Downgrade Reflects Caution Among Analysts

One 97 Communications Ltd’s mojo score currently stands at 62.0, with a mojo grade of Hold, downgraded from Buy on 24 December 2025. This shift reflects a more cautious stance by analysts, who have noted deteriorating fundamentals or increased risk factors. The company’s market capitalisation is ₹83,104 crore, placing it in the mid-cap category within the Financial Technology sector.

The downgrade aligns with the observed market behaviour, where investors are increasingly hedging against downside risks through put options. The combination of a falling mojo grade and heavy put option activity suggests that market participants are bracing for potential near-term headwinds, despite the company’s established position in the fintech space.

Expiry Patterns and Strategic Positioning

The concentration of put option trades and open interest at the 27 January 2026 expiry date indicates that traders are focusing on this near-term horizon for potential price movements. The clustering of strike prices between ₹1,120 and ₹1,200, close to the current underlying price, suggests a tactical approach to hedging or speculative bearish bets. This pattern often emerges when investors anticipate volatility or a correction but remain uncertain about the exact timing or magnitude.

Such activity can also be interpreted as a form of portfolio insurance, where holders of the stock seek protection against downside risk by purchasing puts. Alternatively, speculative traders may be positioning to profit from a decline, especially given the stock’s recent underperformance relative to its sector and benchmark indices.

Implications for Investors and Market Outlook

Investors should interpret the heavy put option activity as a signal of increased caution surrounding One 97 Communications Ltd. The stock’s recent price volatility, coupled with a downgrade in mojo grade and underperformance relative to peers, suggests that downside risks are currently elevated. Traders employing options strategies appear to be hedging existing positions or speculating on a near-term correction ahead of the January expiry.

However, the stock’s position above the 200-day moving average indicates that longer-term support remains intact, which could provide a floor if market conditions stabilise. Investors with a bullish outlook may consider monitoring the evolving open interest and price action closely, as a sustained decline in put option volumes or a rebound in mojo grade could signal a shift in sentiment.

Given the fintech sector’s dynamic nature and the company’s sizeable market capitalisation, fundamental developments such as earnings announcements, regulatory changes, or macroeconomic factors could rapidly influence the stock’s trajectory. Therefore, a balanced approach combining technical signals with fundamental analysis is advisable for portfolio management.

Summary

One 97 Communications Ltd’s recent surge in put option volumes and open interest at strike prices near the current market level highlights a growing bearish sentiment among investors. The stock’s volatile price action, downgrade in mojo grade, and underperformance relative to sector and benchmark indices reinforce the cautious outlook. While the near-term expiry patterns suggest hedging and speculative activity, the longer-term technical support offers some reassurance. Investors should remain vigilant and consider alternative opportunities as market conditions evolve.

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