Tata Motors Passenger Vehicles Sees Surge in Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Indicates Bearish Hedging

On 2 February 2026, TMPV recorded the highest put option volume among automobile stocks, with 5,377 contracts traded at the ₹350 strike price expiring on 24 February 2026. This activity generated a turnover of approximately ₹467.58 lakhs, reflecting significant investor interest in downside protection or speculative bearish bets. Open interest for these puts stands at 2,804 contracts, suggesting that the elevated activity is not merely intraday speculation but part of a broader positioning strategy.

The underlying stock price at the time was ₹357.10, marginally above the ₹350 strike, indicating that investors may be anticipating a potential correction or increased volatility in the near term. The strike price chosen is close to the current market price, which often implies a hedging motive rather than deep speculative shorts.

Stock Performance and Technical Context

Despite the bearish options activity, TMPV outperformed its sector by 2.64% on the day, registering a 3.80% gain compared to the sector’s 0.93% and the Sensex’s 0.23%. The stock touched an intraday high of ₹358.55, marking a 4.03% rise. This rebound followed two consecutive days of declines, suggesting a possible short-term trend reversal.

Technically, TMPV’s price is trading above its 5-day, 20-day, and 50-day moving averages but remains below the 100-day and 200-day averages. This mixed technical picture indicates that while short-term momentum is positive, medium- to long-term trends remain under pressure. Rising delivery volumes, which increased by 9.44% to 63.04 lakhs on 30 January compared to the five-day average, point to growing investor participation and liquidity, with a trade size capacity of approximately ₹8.05 crores based on recent volumes.

Mojo Score and Analyst Ratings Reflect Caution

Tata Motors Passenger Vehicles Ltd carries a Mojo Score of 36.0, categorised as a Sell, a downgrade from its previous Hold rating on 4 November 2024. The company’s market cap grade is 1, indicating a large-cap status with a market capitalisation of ₹1,28,734 crores. This downgrade and relatively low Mojo Score align with the increased put option activity, signalling that analysts and investors are adopting a more cautious stance on the stock’s near-term prospects.

Implications of Elevated Put Activity for Investors

The surge in put option volumes at a strike price just below the current market level suggests that investors are either hedging existing long positions or speculating on a near-term decline. Given the stock’s recent gains and technical positioning, this could reflect concerns over upcoming earnings, sector headwinds, or broader market volatility impacting the automobile industry.

Put options serve as insurance against price drops, and the ₹350 strike price is a critical support level to watch. Should the stock fall below this level before expiry, these puts would gain value, providing downside protection or profit opportunities for holders. Conversely, if the stock maintains or rises above this level, the puts may expire worthless, indicating that the bearish bets did not materialise.

Expiry Patterns and Market Sentiment

The 24 February 2026 expiry date is less than a month away, intensifying the focus on short-term price movements. The concentration of put contracts at this expiry suggests that investors are positioning for potential volatility or a correction within this timeframe. This pattern is consistent with a cautious market outlook, especially given the recent downgrade in the stock’s Mojo Grade and the mixed technical signals.

Sector and Market Context

The automobile sector has been navigating a complex environment marked by fluctuating demand, supply chain challenges, and evolving regulatory frameworks. Tata Motors Passenger Vehicles Ltd, as a key player, is not immune to these pressures. The stock’s outperformance relative to its sector on the day may be a short-term rebound rather than a sustained uptrend, as reflected by the cautious options market positioning.

Investors should monitor upcoming corporate announcements, macroeconomic indicators, and sectoral developments closely, as these factors will influence the stock’s trajectory and the validity of the current bearish hedging strategies.

Investor Takeaway

For investors holding or considering Tata Motors Passenger Vehicles Ltd, the current elevated put option activity serves as a cautionary signal. While the stock has shown resilience in the short term, the bearish positioning in the options market and the recent downgrade in analyst sentiment suggest that downside risks remain. Prudent investors may consider hedging strategies or exploring alternative stocks with stronger momentum and more favourable outlooks.

Monitoring open interest and volume trends in options alongside price action will be crucial in the coming weeks to gauge whether the bearish sentiment intensifies or dissipates ahead of the February expiry.

Conclusion

The significant put option activity in Tata Motors Passenger Vehicles Ltd ahead of the 24 February 2026 expiry highlights a growing sense of caution among market participants. Despite recent gains and outperformance, the stock faces headwinds reflected in its Mojo Score downgrade and mixed technical indicators. Investors should remain vigilant, balancing short-term opportunities with the risks signalled by the options market.

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