SBI Cards Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

On 29 January 2026, SBI Cards witnessed a surge in put option contracts, with 1,908 contracts traded at the 780 strike price for the expiry date of 24 February 2026. This activity generated a turnover of approximately ₹44.10 crores (440.97696 lakhs), indicating substantial investor interest in downside protection or speculative bearish bets. The open interest currently stands at 800 contracts, suggesting that a sizeable portion of these positions remain active and could influence price dynamics as expiry approaches.

The underlying stock price at the time was ₹767.85, trading below the 780 strike price, which implies that these put options are either at-the-money or slightly in-the-money. This positioning typically reflects expectations of further downside or a hedge against potential declines.

Technical and Price Performance Context

SBI Cards has underperformed its sector by 0.98% on the day, with a 1-day return of -2.67%, compared to the sector’s marginal decline of -0.01% and the Sensex’s broader fall of -0.48%. The stock touched an intraday low of ₹763.45, down 2.42% from the previous close, signalling increased selling pressure.

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which is a bearish indicator suggesting a sustained downtrend. The recent trend reversal after two consecutive days of gains further confirms the weakening momentum.

Investor participation has risen, with delivery volumes on 28 January reaching 6.43 lakh shares, a 4.81% increase over the five-day average delivery volume. This heightened activity may reflect both increased hedging demand and speculative positioning in anticipation of further volatility.

Fundamental and Market Positioning

SBI Cards & Payment Services Ltd operates in the Non Banking Financial Company (NBFC) sector and holds a market capitalisation of ₹74,437 crores, categorising it as a mid-cap stock. Despite its size, the company’s Mojo Score has deteriorated to 44.0, with a recent downgrade from Hold to Sell on 20 January 2026. The Market Cap Grade remains low at 2, indicating limited market strength relative to peers.

This downgrade reflects concerns over the company’s earnings outlook, asset quality, and competitive pressures in the NBFC space. The bearish sentiment is now being mirrored in the options market, where investors are increasingly seeking downside protection through put options.

Expiry Patterns and Investor Strategies

The concentration of put option activity at the 780 strike price for the 24 February 2026 expiry suggests that investors are positioning for a potential decline of approximately 2% from the current underlying price. This expiry date is just under a month away, indicating a short- to medium-term bearish outlook.

Such heavy put buying can serve multiple purposes: speculative bets on a price drop, portfolio hedging against broader market or sector weakness, or arbitrage strategies involving the underlying stock and options. Given the stock’s recent underperformance and technical weakness, hedging appears to be a significant driver.

Liquidity and Trading Viability

SBI Cards remains sufficiently liquid for sizeable trades, with a 5-day average traded value supporting trade sizes up to ₹2.07 crores based on 2% of average volume. This liquidity facilitates active options trading and allows institutional investors to implement complex strategies without excessive market impact.

However, the stock’s declining trend and negative momentum caution investors to carefully assess risk-reward profiles before initiating new positions.

Sector and Peer Comparison

Within the NBFC sector, SBI Cards’ recent downgrade and bearish options activity contrast with some peers that have maintained stable or improving outlooks. This divergence highlights company-specific challenges such as rising credit costs, regulatory pressures, and competitive dynamics in the credit card and payment services market.

Investors should weigh these factors against broader sector trends, which have shown resilience despite macroeconomic headwinds.

Investor Takeaway

The pronounced put option activity in SBI Cards & Payment Services Ltd reflects a growing bearish consensus among market participants. The stock’s technical weakness, recent downgrade to Sell, and underperformance relative to sector and benchmark indices reinforce this cautious stance.

Investors holding SBI Cards shares should consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Meanwhile, those seeking entry points may prefer to monitor for signs of technical stabilisation or fundamental improvement before committing fresh capital.

Options traders should remain vigilant of open interest changes and expiry dynamics, as these can precipitate volatility spikes and price swings in the lead-up to 24 February 2026.

Overall, SBI Cards currently presents a challenging risk-reward profile, with superior opportunities likely available in other NBFCs or sectors exhibiting stronger fundamentals and technicals.

Summary

Heavy put option trading at the 780 strike price for February expiry, combined with a downgrade to Sell and technical underperformance, signals a bearish outlook for SBI Cards & Payment Services Ltd. Investors are advised to exercise caution and consider hedging or switching strategies amid this evolving market environment.

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