SRF Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Surge Highlights Bearish Positioning

On 17 and 18 February 2026, SRF Ltd. emerged as the most active stock in put options trading, with 2,607 contracts exchanged at the ₹2,700 strike price expiring on 24 February. This activity generated a turnover of ₹20.3 crores, underscoring substantial investor interest in downside protection or speculative bearish bets. The open interest currently stands at 969 contracts, indicating that a sizeable number of traders are maintaining their bearish positions or hedges into expiry.

The underlying stock price at ₹2,737.4 is hovering just above the ₹2,700 strike, suggesting that traders are positioning for a potential decline or increased volatility in the near term. This is further supported by the stock’s recent price action and technical indicators.

Technical Weakness Fuels Put Demand

SRF Ltd. has been under pressure in recent sessions, falling by 4.28% over the last two days and underperforming its specialty chemicals sector by 0.98% on the latest trading day. The stock’s 1-day return was a modest -0.20%, while the sector and Sensex posted gains of 0.35% and 0.03% respectively, highlighting relative weakness.

Crucially, SRF is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained downtrend. This technical deterioration has likely prompted investors to seek downside protection through put options or to speculate on further declines.

Investor participation has also risen, with delivery volumes on 17 February reaching 1.76 lakh shares, a 63.69% increase over the 5-day average. This heightened activity suggests growing conviction among market participants regarding the stock’s near-term direction.

Market Cap and Mojo Score Reflect Caution

SRF Ltd. is classified as a mid-cap company with a market capitalisation of approximately ₹81,143.33 crores. Despite its sizeable market presence, the company’s Mojo Score currently stands at 48.0, placing it in the 'Sell' grade category as of 16 February 2026, a downgrade from its previous 'Hold' rating. This shift reflects deteriorating fundamentals or technical outlook as assessed by MarketsMOJO’s proprietary scoring system.

The market cap grade of 2 further indicates moderate liquidity and trading interest, but not enough to shield the stock from volatility or bearish pressures. The downgrade and negative momentum have likely contributed to the increased put option activity as investors seek to hedge or capitalise on expected downside moves.

Expiry Patterns and Strike Price Significance

The 24 February 2026 expiry date is a critical near-term event for SRF Ltd., with the ₹2,700 strike price acting as a focal point for option traders. The concentration of put contracts at this strike suggests that market participants are bracing for a test of this support level or are positioning for a correction below it.

Open interest data reveals that while some contracts have been closed or rolled over, a significant number remain open, indicating sustained bearish sentiment or hedging strategies. This pattern is consistent with a cautious outlook amid broader sectoral and market uncertainties.

Sectoral Context and Comparative Performance

The specialty chemicals sector has shown mixed performance recently, with some stocks maintaining resilience while others face headwinds from raw material costs and global demand fluctuations. SRF Ltd.’s underperformance relative to its sector peers highlights company-specific challenges or investor concerns.

Given the stock’s technical weakness and negative momentum, investors may be reallocating capital towards more promising opportunities within the sector or across other industries.

Investor Implications and Outlook

For investors, the heavy put option activity in SRF Ltd. signals caution. The stock’s technical indicators and recent downgrade suggest that downside risks remain elevated in the short term. Traders holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate potential losses.

Conversely, speculative investors might view the current option premiums as attractive for bearish trades, given the stock’s vulnerability and the proximity of the ₹2,700 strike price to the current market level.

Longer-term investors should monitor upcoming earnings, sectoral developments, and global chemical demand trends to reassess the stock’s fundamental outlook. Any signs of stabilisation or improvement in financial metrics could alter the prevailing negative sentiment and reduce put option interest.

Conclusion

SRF Ltd.’s recent surge in put option trading ahead of the 24 February expiry highlights a market consensus leaning towards caution and bearish positioning. The stock’s underperformance relative to its sector, technical weakness across multiple moving averages, and a recent downgrade to a 'Sell' grade reinforce this outlook.

Investors should carefully weigh the risks and consider hedging strategies or alternative investments within the specialty chemicals space or broader market. The evolving option market data provides valuable insight into sentiment shifts and potential price movements in the near term.

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