Tata Motors Passenger Vehicles Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 6 January 2026, TMPV recorded the most active put option trading with 4,625 contracts exchanged at the ₹360 strike price, generating a turnover of ₹243.83 lakhs. Open interest in these puts stands at 5,205 contracts, indicating sustained investor interest in downside protection or speculative bearish bets. The underlying stock price at the time was ₹365.05, just marginally above the strike, suggesting that traders are positioning for a potential decline below this level before the January expiry.

Stock Performance and Technical Context

Tata Motors Passenger Vehicles Ltd has underperformed its sector by 2.45% on the day, with a 1-day return of -2.74% compared to the sector’s -0.30% and the Sensex’s -0.20%. The stock touched an intraday low of ₹360, down 3.63%, marking a reversal after five consecutive days of gains. While the price remains above the 20-day moving average, it is trading below the 5-day, 50-day, 100-day, and 200-day moving averages, signalling a mixed technical picture with short-term weakness amid longer-term resistance.

Investor participation has risen, with delivery volumes reaching 58.94 lakh shares on 5 January, a 3.9% increase over the five-day average. This heightened activity, combined with the stock’s liquidity supporting trade sizes of up to ₹7.56 crore, underscores the active interest in TMPV shares and derivatives.

Mojo Score and Grade Downgrade

MarketsMOJO’s latest assessment downgraded TMPV’s Mojo Grade from Hold to Sell on 4 November 2024, reflecting deteriorating fundamentals and market sentiment. The company’s Mojo Score stands at 36.0, a relatively low figure indicating weak overall quality and trend metrics. The Market Cap Grade is 1, categorising TMPV as a large-cap stock with limited upside potential under current conditions.

Bearish Positioning and Hedging Strategies

The concentration of put option activity at the ₹360 strike price, close to the current market price, suggests that traders are either hedging existing long positions or speculating on a near-term decline. The open interest of 5,205 contracts is significant, indicating that a sizeable number of investors expect the stock to trade below this level by expiry or are protecting against downside risk.

Given the stock’s recent trend reversal and technical resistance at multiple moving averages, the put buying could be a response to anticipated volatility or a cautious stance amid broader market uncertainties. The automobile sector, while generally stable, has seen pockets of pressure due to global supply chain challenges and fluctuating demand, factors that may be influencing investor sentiment towards TMPV.

Expiry Patterns and Market Implications

The expiry date of 27 January 2026 is critical as it marks the settlement point for these options. The heavy put activity ahead of this date often signals a market consensus on potential downside or increased volatility. Investors and traders should monitor price movements closely in the coming weeks, as a breach below ₹360 could trigger further selling pressure and validate the bearish positioning.

Conversely, if the stock manages to hold above this strike price, put sellers may face losses, and the bearish sentiment could moderate. The interplay between open interest, strike price, and expiry dynamics will be key to understanding TMPV’s near-term trajectory.

Sector and Market Context

The automobile sector has experienced mixed performance recently, with TMPV’s 1-day return of -2.74% notably lagging the sector’s -0.30%. This underperformance reflects company-specific challenges and broader market concerns. Tata Motors Passenger Vehicles Ltd, as a large-cap entity with a market capitalisation of ₹1,37,535 crore, remains a key player but faces headwinds from competitive pressures and evolving consumer preferences.

Investors should weigh the current bearish signals against the company’s long-term prospects, including product launches, technological advancements, and market share dynamics. The downgrade in Mojo Grade to Sell underscores the need for caution, especially for those with significant exposure to TMPV.

Investor Takeaways

For investors and traders, the surge in put option activity at the ₹360 strike price ahead of the 27 January expiry is a clear indication of increased risk aversion or hedging demand. Those holding long positions may consider protective strategies, while speculative traders might view the elevated put volumes as an opportunity to capitalise on potential downside moves.

Monitoring open interest trends, price action relative to key moving averages, and sector developments will be essential in navigating TMPV’s near-term outlook. Given the stock’s liquidity and active participation, timely adjustments to portfolios could mitigate risks or capture emerging opportunities.

Conclusion

Tata Motors Passenger Vehicles Ltd is currently under pressure, as evidenced by its recent price decline, downgrade in Mojo Grade, and significant put option activity. The concentration of puts at the ₹360 strike price ahead of the January expiry highlights a cautious or bearish stance among market participants. While the stock remains a large-cap heavyweight in the automobile sector, investors should remain vigilant and consider hedging or alternative investments in light of the evolving market dynamics.

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