Tata Motors Passenger Vehicles Sees Heavy Put Option Activity Ahead of March Expiry

Put Option Activity Highlights

On 26 February 2026, TMPV recorded a remarkable 3,090 put option contracts traded at the ₹380 strike price, generating a turnover of approximately ₹20.10 crores. The open interest stands at 2,663 contracts, indicating sustained interest and potential accumulation of bearish bets. The underlying stock price closed at ₹389.0, hovering just above the strike price, which suggests that traders are positioning for a possible correction or increased volatility in the near term.

The expiry date for these options is 30 March 2026, providing a window of just over a month for market developments to unfold. This expiry timeline is critical as it coincides with the end of the financial year quarter, a period often marked by portfolio rebalancing and strategic hedging by institutional investors.

Stock Performance and Technical Context

Despite the surge in put option activity, Tata Motors Passenger Vehicles Ltd has outperformed its sector by 1.81% on the day, registering a 2.34% gain and touching an intraday high of ₹390.8. The stock has been on a positive trajectory for the past two consecutive days, delivering a cumulative return of 3.4% during this period. This short-term strength contrasts with the bearish sentiment implied by the options market, highlighting a divergence between spot price momentum and derivatives positioning.

Technically, TMPV is trading above its 5-day, 20-day, 50-day, and 100-day moving averages, signalling short to medium-term strength. However, it remains below the 200-day moving average, which often serves as a key long-term trend indicator. This mixed technical picture may be contributing to the cautious stance adopted by options traders, who could be seeking protection against a potential pullback.

Investor participation appears to be waning, with delivery volumes on 25 February falling by 12.76% compared to the five-day average, suggesting reduced conviction among buyers. Liquidity remains adequate, with the stock capable of handling trade sizes up to ₹6.49 crores based on 2% of the five-day average traded value, ensuring that both spot and derivatives markets remain accessible for active participants.

Mojo Score and Analyst Ratings

Tata Motors Passenger Vehicles Ltd currently holds a Mojo Score of 41.0, categorised as a 'Sell' grade by MarketsMOJO. This represents a downgrade from a previous 'Hold' rating issued on 4 November 2024. The downgrade reflects deteriorating fundamentals or increased risk factors identified by the analytics platform. The company’s market capitalisation stands at a substantial ₹1,43,354.96 crores, classifying it as a large-cap stock within the automobile sector.

The low Market Cap Grade of 1 further emphasises the cautious stance adopted by analysts, suggesting that despite the company’s size, there are concerns over near-term performance or valuation metrics. This bearish outlook aligns with the heightened put option activity, reinforcing the narrative of investor hedging and risk aversion.

Sector and Market Comparison

On the day of analysis, TMPV’s 1-day return of 1.95% outpaced the automobile sector’s 0.54% gain and the broader Sensex’s 0.21% increase. This relative outperformance may be attracting short-term traders and momentum investors. However, the options market’s preference for puts at the ₹380 strike price indicates that a segment of the market is preparing for a potential reversal or increased downside risk.

Such divergence between spot market gains and derivatives market bearishness is not uncommon in volatile sectors like automobiles, where cyclical factors, regulatory changes, and commodity price fluctuations can rapidly alter investor sentiment.

Implications for Investors and Traders

The surge in put option volumes at a strike price slightly below the current market price suggests that investors are either hedging existing long positions or speculating on a near-term decline. Given the expiry date in late March, traders should monitor upcoming quarterly results, macroeconomic indicators, and sector-specific developments closely.

For long-term investors, the downgrade in Mojo Grade and the low Market Cap Grade warrant a cautious approach, especially considering the mixed technical signals and falling delivery volumes. Short-term traders might find opportunities in volatility plays, but should remain vigilant about the evolving risk landscape.

Overall, the data points to a market environment where protective strategies are gaining traction, reflecting uncertainty despite recent price gains. This dynamic underscores the importance of integrating derivatives market insights into broader investment decision-making processes.

Expiry Patterns and Market Sentiment

The concentration of put option activity at the ₹380 strike price, which is approximately 2.3% below the current market price, is indicative of a key support level that traders are watching closely. The open interest accumulation suggests that this strike price is a focal point for hedging strategies, possibly reflecting expectations of a price correction or increased volatility as expiry approaches.

Expiry patterns in the Indian derivatives market often see heightened activity in the weeks leading up to the final trading day, as traders adjust positions to manage risk or capitalise on anticipated price movements. The sizeable turnover and open interest in TMPV puts highlight the stock’s prominence in this context and the market’s cautious stance.

Conclusion

Tata Motors Passenger Vehicles Ltd is currently at the centre of significant put option trading activity, signalling a notable degree of bearish positioning despite recent gains in the underlying equity. The combination of a Mojo Score downgrade, mixed technical indicators, and falling delivery volumes suggests that investors are adopting a defensive posture amid uncertainty.

Market participants should closely monitor developments in the automobile sector, upcoming earnings announcements, and broader economic indicators to gauge the sustainability of the current trend. The derivatives market data provides valuable insight into investor sentiment and potential price trajectories, making it an essential tool for informed decision-making in this large-cap stock.

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