Polycab India Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 14 January 2026, Polycab India Ltd emerged as one of the most actively traded stocks in the put options segment. The strike prices of ₹7,500 and ₹7,000 attracted the highest volumes, with 1,866 and 2,251 contracts traded respectively. The turnover for the ₹7,500 strike put options stood at ₹531.65 lakhs, while the ₹7,000 strike options accounted for ₹162.72 lakhs in turnover. Open interest figures remain robust at 1,088 and 1,021 contracts respectively, indicating sustained investor interest in these bearish positions.

The underlying stock price at the time was ₹7,418, placing the ₹7,500 strike slightly out-of-the-money and the ₹7,000 strike further below the current market price. This concentration of put option activity near and below the current price level suggests that market participants are either hedging existing long positions or speculating on a potential downside move in the near term.

Recent Price Performance and Technical Context

Polycab India Ltd has underperformed its sector by 1.98% on the day, with the stock price falling 1.94% to close near ₹7,418. The stock has been on a consecutive five-day decline, losing 6.23% over this period. Notably, it opened with a gap down of 3% and touched an intraday low of ₹7,328, reflecting heightened selling pressure.

From a technical standpoint, the stock remains above its 200-day moving average, a long-term bullish indicator, but trades below its 5-day, 20-day, 50-day, and 100-day moving averages. This mixed technical picture points to short-term weakness amid a longer-term uptrend. Rising investor participation is evident, with delivery volumes on 13 January reaching 2.42 lakh shares, a 35.89% increase over the five-day average, signalling active trading interest despite the price decline.

Liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹5.47 crore based on 2% of the five-day average traded value, ensuring that option and equity trades can be executed without significant market impact.

Fundamental and Market Positioning

Polycab India Ltd operates in the cables and electricals sector, a segment that has shown resilience amid fluctuating commodity prices and infrastructure demand. The company’s market capitalisation stands at ₹1,11,532.84 crore, categorising it as a mid-cap stock with significant institutional interest.

MarketsMOJO recently upgraded Polycab’s Mojo Grade from Hold to Buy on 21 July 2025, reflecting improved fundamentals and positive outlook. The Mojo Score of 71.0 supports this upgrade, indicating strong financial health, earnings growth potential, and favourable valuation metrics relative to peers.

Despite the recent price weakness and bearish option activity, the company’s market cap grade remains at 2, suggesting moderate size and liquidity. Investors appear to be balancing the stock’s solid fundamentals against near-term technical pressures and broader market volatility.

Expiry Patterns and Investor Sentiment

The expiry date of 27 January 2026 is drawing attention as traders position themselves ahead of this key options expiry. The heavy put option volumes at the ₹7,500 and ₹7,000 strikes indicate a strategic hedging approach or speculative bearish bets. Such activity often precedes increased volatility, as market participants adjust their portfolios in response to evolving risk perceptions.

Open interest data confirms that these put options are not merely short-term trades but represent meaningful exposure. The combination of high turnover and substantial open interest suggests that investors are actively managing downside risk or anticipating a correction in Polycab’s share price.

Given the stock’s recent five-day decline and technical signals, this put option activity aligns with a cautious market stance. However, the underlying fundamentals and recent upgrade imply that any weakness could be temporary, presenting potential buying opportunities for long-term investors.

Implications for Investors

For investors, the surge in put option activity at key strike prices near the current market level signals a need for vigilance. Those holding long positions in Polycab India Ltd may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk ahead of the January expiry.

Conversely, contrarian investors might view the elevated put volumes and recent price weakness as a potential entry point, especially given the company’s strong fundamentals and recent upgrade. The stock’s position above its 200-day moving average suggests that the long-term trend remains intact, despite short-term volatility.

Sector peers and the broader Sensex have shown relatively muted movements, with the sector down 0.39% and Sensex nearly flat at -0.02% on the day. This relative underperformance by Polycab highlights stock-specific factors driving investor caution.

Overall, the current option market dynamics reflect a nuanced outlook where investors balance optimism about Polycab’s growth prospects against near-term technical challenges and market uncertainties.

Conclusion

Polycab India Ltd’s heavy put option trading ahead of the 27 January 2026 expiry underscores a growing bearish sentiment or hedging activity among market participants. While the stock has experienced a notable short-term decline and technical weakness, its fundamental strength and recent upgrade to a Buy rating provide a counterbalance to the cautious positioning.

Investors should closely monitor price action and option market trends in the coming days, as expiry approaches, to gauge whether the current bearish sentiment will persist or if a rebound is on the horizon. Strategic hedging and risk management remain prudent given the stock’s recent volatility and active options market.

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