Polycab India Sees Surge in Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Highlights Bearish Sentiment

On 10 March 2026, Polycab India Ltd emerged as the most active stock in put options, with 4,955 contracts traded at the 7,500 strike price for the expiry date of 30 March 2026. This surge in put option volume corresponds to a turnover of approximately ₹876.23 lakhs, underscoring substantial investor interest in downside protection or speculative bearish bets. The open interest at this strike stands at 858 contracts, indicating sustained positioning rather than transient trades.

The underlying stock price closed at ₹7,766, hovering just above the 7,500 strike, which suggests that traders are positioning for a potential correction or increased downside risk in the near term. The weighted average price of traded options clustered near the day’s low further emphasises the bearish bias prevailing in the market.

Stock Performance and Volatility Context

Polycab India Ltd has been on a downward trajectory, losing 5.61% on the day and underperforming its sector by 4.98%. Over the past three consecutive sessions, the stock has declined by 9.33%, reflecting sustained selling pressure. Intraday volatility was notably high at 5.06%, calculated from the weighted average price, highlighting the stock’s turbulent trading environment.

The stock touched an intraday low of ₹7,745, close to the put strike price, reinforcing the relevance of the 7,500 level as a critical support zone. Despite this recent weakness, Polycab’s price remains above its 50-day, 100-day, and 200-day moving averages, though it trades below the shorter-term 5-day and 20-day averages, signalling a potential shift in momentum.

Investor Participation and Liquidity Dynamics

Investor participation appears to be waning, with delivery volumes on 9 March falling by 12.68% compared to the five-day average, registering at 2.89 lakh shares. This decline in delivery volume suggests reduced conviction among long-term holders amid the recent price slide. However, liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹8.55 crore based on 2% of the five-day average traded value, ensuring that market participants can execute sizeable trades without significant price impact.

Mojo Score Upgrade Reflects Positive Long-Term Outlook Despite Near-Term Pressure

Despite the recent bearish activity in the options market, Polycab India Ltd’s fundamental outlook remains robust. The company holds a strong Mojo Score of 78.0, reflecting solid financial health and growth prospects. Notably, the Mojo Grade was upgraded from Hold to Buy on 21 July 2025, signalling improved confidence in the stock’s medium to long-term trajectory.

Polycab’s market capitalisation stands at a substantial ₹1,23,494 crore, categorising it as a large-cap stock within the cables and electricals sector. The company’s Market Cap Grade is rated 1, indicating top-tier market capitalisation relative to peers. This stature often attracts institutional investors who may use options for hedging or tactical positioning, which could explain the elevated put option volumes.

Expiry Patterns and Strike Price Significance

The 30 March 2026 expiry date is the nearest monthly expiry, a period typically marked by heightened options activity as traders adjust or close positions. The concentration of put contracts at the 7,500 strike price, just below the current market price, suggests that investors are hedging against a moderate downside or speculating on a correction to this level.

Such strike price clustering is a common feature in options markets, often serving as a psychological support or resistance level. Should the stock breach this strike decisively, it could trigger further downside momentum, potentially validating the bearish bets embedded in the options market.

Sector and Market Comparison

Polycab’s underperformance contrasts with the broader market trends, where the Sensex gained 0.88% on the same day, and the cables and electricals sector declined marginally by 0.43%. This relative weakness highlights company-specific factors or investor concerns that are not broadly shared across the sector or market.

Given the stock’s recent volatility and put option interest, market participants should closely monitor upcoming earnings announcements, sector developments, and macroeconomic indicators that could influence Polycab’s price trajectory.

Investor Implications and Outlook

The surge in put option activity at a strike price close to the current market level signals caution among investors. This could be interpreted as a hedging strategy by long holders seeking protection against further declines or as speculative positioning anticipating a near-term correction.

For investors, the key will be to balance the short-term bearish signals from the options market with the company’s fundamentally positive outlook and recent upgrade in Mojo Grade. Monitoring open interest trends and price action around the 7,500 strike will provide valuable clues on whether the bearish sentiment will intensify or dissipate.

Given Polycab’s large-cap status and liquidity, the stock remains a viable candidate for strategic options plays, including protective puts or spreads, to manage risk amid ongoing market volatility.

Conclusion

Polycab India Ltd’s recent put option surge reflects heightened investor caution amid a backdrop of price weakness and elevated volatility. While the stock’s fundamentals and upgraded Mojo Grade suggest a positive medium-term outlook, the derivatives market is signalling potential near-term downside risks. Investors should remain vigilant, leveraging detailed research and technical analysis to navigate this complex environment effectively.

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