Rs 1,300 Puts — 4.1% Below Current Price — Draw 3,861 Contracts on One 97 Communications Ltd

Put Options Event and Cash Market Context

The most active put strikes for One 97 Communications Ltd on 21 Jul 2026 were Rs 1,300 and Rs 1,340, with 3,861 and 2,918 contracts traded respectively. The Rs 1,300 strike, in particular, saw a turnover of ₹379.02 lakhs and open interest of 1,906 contracts, indicating fresh positioning. The Rs 1,340 strike, slightly closer to the money, had 1,413 open interest contracts. The underlying stock closed near its 52-week high, just 3.38% shy of Rs 1,407, and outperformed its sector by 0.7% on the day, rising 0.82% while the Sensex declined marginally.

This juxtaposition of rising stock price and heavy put activity raises the question: is this put buying a sign of hedging against a pullback or a bearish bet on a reversal?

Strike Price Analysis: Moneyness and Intent

The Rs 1,300 put strike sits approximately 4.1% below the current market price of Rs 1,356.80, categorising it as an out-of-the-money (OTM) put. The Rs 1,340 strike is closer, about 1.2% OTM. OTM puts are often purchased as insurance against downside risk rather than outright bearish bets, especially when the underlying is near a high and showing strength. The expiry date for these options is 28 Jul 2026, just a week away, which adds urgency to the positioning.

Given the stock’s proximity to its 52-week high and its position above the 20-day, 50-day, 100-day, and 200-day moving averages (though slightly below the 5-day MA), these strikes align with a technical support zone rather than deep bearish conviction. Could this be a tactical hedge against a short-term pullback rather than a directional bet?

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

Put option activity can be ambiguous. The three main interpretations are:

• Protective Hedging: Investors holding long positions buy OTM puts to guard against a decline, especially after recent gains.
• Bearish Positioning: Traders buy puts anticipating a drop in the stock price, often at or near the money.
• Put Writing (Selling): Selling puts to collect premium, implying confidence the stock will not fall below the strike.

In this case, the Rs 1,300 strike is OTM and the stock is near a high, suggesting hedging is the dominant motive. The sizeable number of contracts traded (3,861) against an open interest of 1,906 indicates fresh buying rather than just rollovers or closing positions. The Rs 1,340 strike also shows similar patterns but with slightly less turnover.

Put writing is less likely here given the high premiums paid (₹379.02 lakhs turnover) and the proximity to expiry, which typically deters aggressive selling at strikes close to the current price. Meanwhile, bearish bets would more likely concentrate at or in-the-money strikes if the market expected a sharp decline.

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest at the Rs 1,300 strike is roughly 2:1, signalling significant fresh activity. This suggests new positions are being established rather than merely adjustments to existing ones. The Rs 1,340 strike shows a similar pattern with a ratio near 2:1 as well. Such fresh positioning at OTM strikes during a rally is consistent with protective hedging rather than outright bearish speculation.

Moreover, the open interest levels remain moderate, indicating that while the put activity is notable, it is not overwhelming relative to the stock’s liquidity and market cap of ₹86,364 crores.

Cash Market Momentum and Technical Context

One 97 Communications Ltd has been trading strongly, supported by rising delivery volumes which increased by 0.85% against the five-day average to 13.34 lakh shares on 20 Jul 2026. The stock is comfortably above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling sustained medium- to long-term strength, though it is slightly below the 5-day moving average, indicating some short-term consolidation.

Delivery volumes rising alongside a price rally typically indicate genuine buying interest, but the day's weighted average price skewed towards the low end, suggesting some profit-taking or cautious positioning. This nuanced price action supports the idea that investors may be seeking downside protection through puts rather than betting on a sharp fall.

Delivery Volume and Market Participation

Delivery volume is a key indicator of the quality of price moves. The recent rise in delivery volume for One 97 Communications Ltd suggests that the rally is supported by genuine investor participation rather than speculative intraday trading. This lends further weight to the interpretation that the put buying is protective rather than bearish, as investors seek to safeguard gains amid a cautious market backdrop.

Additionally, the stock’s liquidity, with a trade size capacity of approximately ₹8.58 crores based on recent averages, supports active options trading without excessive price impact.

Conclusion: Protective Hedging Dominates Put Activity

The heavy put option activity at Rs 1,300 and Rs 1,340 strikes on One 97 Communications Ltd appears to be primarily protective hedging rather than outright bearish positioning or put writing. The stock’s strong technical position near its 52-week high, rising delivery volumes, and fresh open interest at OTM strikes all support this interpretation.

While the possibility of some bearish bets cannot be entirely ruled out, the data suggests investors are more focused on guarding gains amid short-term consolidation. Should investors consider similar protective strategies or is the rally set to continue?

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