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

Heavy Put Option Volumes at Key Strike Prices

Data from the derivatives market reveals that put options with strike prices of ₹330, ₹335, and ₹340 have been the most actively traded for TMPV, all expiring on 27 January 2026. The ₹340 strike put leads with 9,925 contracts traded, generating a turnover of ₹436.7 lakhs and an open interest of 3,628 contracts. Close behind, the ₹335 strike put saw 8,799 contracts traded with a turnover of ₹291.42 lakhs and open interest of 4,387 contracts. The ₹330 strike put recorded 5,998 contracts traded, turnover of ₹114.2 lakhs, and open interest of 4,490 contracts.

This concentrated activity at strikes just below and around the current underlying price of ₹343.2 suggests that traders are positioning for a potential downside move or seeking protection against further declines in the near term.

Stock Performance and Technical Context

Tata Motors Passenger Vehicles closed the day down 3.14%, significantly underperforming its sector which declined by only 0.20%, and the Sensex which fell 0.52%. The stock touched an intraday low of ₹338.35, marking a 4.31% drop from the previous close. Notably, TMPV is trading below all major moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a sustained bearish trend.

The stock is currently just 3.17% above its 52-week low of ₹331.09, indicating proximity to a critical support level. Despite a brief two-day rally, the recent reversal has intensified concerns among investors, reflected in the rising delivery volume of 75.79 lakhs on 16 January, which surged nearly 60% above the five-day average.

Bearish Positioning and Hedging Strategies

The surge in put option volumes at strikes near the current market price indicates that investors are either speculating on further downside or hedging existing long positions. The open interest figures, particularly at ₹330 and ₹335 strikes, suggest that these levels are being closely watched as potential support zones.

Given the stock’s large-cap status with a market capitalisation of ₹1,30,207 crores and a Mojo Score of 36.0, which recently deteriorated from a Hold to a Sell rating on 4 November 2024, the bearish sentiment is backed by fundamental concerns. The Market Cap Grade of 1 further reflects limited upside potential in the near term.

Investors employing put options at these strikes may be seeking downside protection ahead of the expiry, especially as the stock trades below all key moving averages and faces pressure from sector underperformance. The elevated turnover in put contracts, totalling over ₹842 lakhs across the three key strikes, highlights the cost investors are willing to pay for downside insurance.

Expiry Patterns and Market Implications

The 27 January 2026 expiry is shaping up as a critical juncture for TMPV. The concentration of open interest and traded volumes in puts at strikes between ₹330 and ₹340 suggests that market participants expect volatility or a directional move before or at expiry. This pattern is often indicative of hedging activity by institutional investors or speculative bets by traders anticipating a correction.

Given the stock’s recent underperformance relative to the automobile sector and the broader market, the put option activity may also reflect concerns about near-term earnings, demand outlook, or macroeconomic headwinds affecting the automobile industry.

Investor Takeaways and Outlook

For investors and traders, the current put option activity in Tata Motors Passenger Vehicles Ltd signals caution. The stock’s technical weakness, combined with a downgrade in its Mojo Grade and a low Market Cap Grade, suggests limited near-term upside and elevated risk of further declines.

Those holding long positions may consider protective puts at strikes around ₹335 or ₹340 to hedge against downside risk, while speculative traders might view the elevated put volumes as an opportunity to capitalise on potential volatility ahead of expiry.

However, given the stock’s liquidity profile—capable of handling trade sizes up to ₹6.91 crores based on 2% of the five-day average traded value—active traders can execute options strategies with relative ease.

Ultimately, the market’s bearish positioning through puts reflects a cautious stance on TMPV, underscoring the need for investors to closely monitor price action and sector developments in the coming weeks.

Summary of Key Metrics

• Current underlying price: ₹343.2

• Most active put strikes: ₹330, ₹335, ₹340

• Total put contracts traded (27 Jan expiry): 25,722

• Total put turnover: ₹842.3 lakhs

• Open interest concentration: ~4,400 contracts at ₹330 and ₹335 strikes

• Mojo Score: 36.0 (Sell, downgraded from Hold on 4 Nov 2024)

• Market Cap: ₹1,30,207 crores (Large Cap)

• Day’s price change: -3.14% (underperformed sector by -3.17%)

• Proximity to 52-week low: 3.17% above ₹331.09

As expiry approaches, the interplay between option positioning and underlying price movement will be critical to watch for signals on the stock’s near-term trajectory.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →