ONGC Sees Heavy Put Option Activity Amid Bullish Price Momentum

Robust Price Performance Contrasts with Put Option Interest

ONGC’s stock price closed at ₹262.2, just 1.07% shy of its 52-week high of ₹263.49, reflecting a strong upward momentum. The stock has outperformed its sector by 2.95% today and has recorded a consecutive five-day gain, delivering an impressive 8.45% return over this period. Intraday, the share touched a high of ₹262.7, marking a 5.95% rise on the day.

Technical indicators further reinforce the bullish trend, with ONGC trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. The oil exploration and refinery sector itself has gained 2.28%, supported by rising investor participation. Delivery volumes surged to 90.13 lakh shares on 27 January, an 82.89% increase over the five-day average, signalling strong market interest.

Additionally, ONGC offers a high dividend yield of 5.04%, enhancing its appeal to income-focused investors. The stock’s liquidity remains robust, with the ability to handle trade sizes of approximately ₹5.2 crore based on 2% of the five-day average traded value.

Put Option Activity Highlights Bearish Hedging

Contrasting the bullish price action, the options market reveals a surge in put option contracts for ONGC, particularly at the ₹260 strike price expiring on 24 February 2026. A total of 1,590 put contracts changed hands, generating a turnover of ₹29.836 crores (298.3635 lakhs) and an open interest of 645 contracts. This level of activity is significant given the underlying stock price hovering just above the strike price.

Such concentrated put option trading suggests that market participants are either hedging existing long positions or speculating on a potential near-term correction. The ₹260 strike is a psychologically important level, close to the current market price, making these puts attractive for protective strategies or bearish bets.

Open interest at this strike remains moderate but meaningful, indicating that these positions are not merely speculative but could influence price dynamics as expiry approaches. The weighted average price of traded options skewing towards the lower end of the price range further implies cautious sentiment among traders.

Mojo Score and Rating Reflect Cautious Outlook

MarketsMOJO assigns ONGC a Mojo Score of 58.0, categorising it as a Hold with a recent downgrade from Buy on 19 January 2026. The Market Cap Grade stands at 1, reflecting its status as a large-cap heavyweight with a market capitalisation of ₹3,30,119.11 crore. This rating adjustment aligns with the mixed signals from price momentum and options market activity, suggesting investors should exercise caution.

While the stock’s fundamentals remain solid, the increased put option interest may indicate growing concerns about near-term volatility or profit-taking. Investors should monitor the evolving open interest and price action closely as the 24 February expiry approaches.

Sectoral and Market Context

The oil sector’s recent gains have been supported by improving global energy demand and stabilising crude prices. ONGC, as a key player in oil exploration and production, benefits from these tailwinds. However, geopolitical uncertainties and regulatory developments continue to inject volatility into the sector.

Comparatively, ONGC’s 1-day return of 5.83% outpaces the sector’s 2.41% and the Sensex’s modest 0.52% gains, underscoring its relative strength. Yet, the options market’s bearish undertone suggests some investors are positioning for a potential pullback or hedging against downside risks.

Investor Implications and Strategy

For investors holding ONGC shares, the surge in put option activity at the ₹260 strike price may serve as a warning signal to consider protective measures such as stop-loss orders or option-based hedges. The stock’s proximity to its 52-week high and recent strong run-up could invite profit-booking or increased volatility.

Conversely, traders with a bullish outlook might view the elevated put option volumes as an opportunity to sell premium or implement spread strategies to capitalise on potential volatility contraction. The high dividend yield also provides a cushion for long-term holders amid short-term fluctuations.

Given the stock’s liquidity and active trading volumes, ONGC remains a viable candidate for tactical option plays, but investors should remain vigilant to market developments and expiry dynamics.

Expiry Patterns and Market Sentiment

Options expiry dates often act as focal points for price volatility and positioning shifts. The 24 February 2026 expiry is attracting significant attention in ONGC’s put options, which could lead to increased price swings as traders adjust or close positions.

Open interest data suggests that the ₹260 strike is a key battleground, with traders balancing between downside protection and speculative bearish bets. The interplay between the underlying’s strong technicals and the options market’s caution creates a nuanced environment for investors.

Market participants should watch for changes in open interest and volume in the coming weeks, as these will provide clues on whether the bearish sentiment intensifies or dissipates.

Conclusion: Balanced Approach Recommended

ONGC’s recent price strength and dividend yield make it an attractive stock within the oil sector, yet the surge in put option activity signals caution. Investors should weigh the positive fundamentals against the growing hedging and bearish positioning evident in the options market.

Prudent investors may consider a balanced approach, combining long-term conviction with tactical risk management strategies to navigate potential near-term volatility. Monitoring expiry-related dynamics and sectoral developments will be crucial in the weeks ahead.

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