TVS Motor Sees Heavy Put Option Activity Amid Mixed Price Signals

Heavy Put Option Trading Highlights Bearish Sentiment

On 28 January 2026, TVS Motor Company Ltd (NSE: TVSMOTOR) witnessed a remarkable spike in put option volumes, with 6,885 contracts traded at the ₹3,500 strike price expiring on 24 February 2026. This activity generated a turnover of approximately ₹86.23 crores, underscoring significant investor interest in downside protection or speculative bearish bets. The open interest at this strike stands at 1,162 contracts, indicating sustained positioning rather than a one-off trade.

The underlying stock closed at ₹3,689.90, trading above the ₹3,500 strike but showing signs of volatility with an intraday low of ₹3,496 and a high of ₹3,703.90. The weighted average price of options traded was closer to the lower end of the price range, suggesting that traders are pricing in potential downside risk in the near term.

Stock Performance and Technical Context

TVS Motor has outperformed its sector by 2.28% on the day, delivering a 3.81% gain compared to the automobile sector’s 1.26% and the Sensex’s modest 0.28% rise. The stock has recorded gains for two consecutive sessions, accumulating a 3.72% return over this period. Despite this positive momentum, the stock’s price remains below its 20-day moving average but comfortably above its 5-day, 50-day, 100-day, and 200-day averages. This mixed technical picture may be prompting cautious investors to hedge their positions with put options.

Investor participation has also risen notably, with delivery volumes on 27 January reaching 5.47 lakh shares, a 51.51% increase over the five-day average. Liquidity remains robust, with the stock capable of handling trade sizes worth ₹5.14 crores based on 2% of the five-day average traded value, facilitating active options and equity trading.

Mojo Score Upgrade Reflects Positive Fundamentals Amid Volatility

Despite the increased put option activity, TVS Motor’s fundamental outlook remains positive. The company’s Mojo Score stands at 74.0, categorised as a Buy, upgraded from Hold on 6 November 2025. This upgrade reflects improved financial metrics and quality grades, signalling confidence from MarketsMOJO’s Investment Committee in the company’s medium-term prospects.

TVS Motor is a large-cap stock with a market capitalisation of ₹1,67,706 crores, operating in the highly competitive automobile sector. The company’s recent operational performance and strategic initiatives have contributed to its improved rating, although the current options market activity suggests some investors are positioning for near-term downside or volatility.

Put Options as a Hedging and Speculative Tool

The surge in put option volumes at the ₹3,500 strike price, which is approximately 5.1% below the current underlying price, indicates that market participants are either hedging existing long positions or speculating on a potential price correction. The expiry date of 24 February 2026 is just under a month away, making these options a short-term instrument for managing risk or capitalising on expected volatility.

Open interest data confirms that these positions are not fleeting, with over a thousand contracts still open, suggesting that traders are maintaining their bearish or protective stances. This pattern is consistent with a cautious market environment where investors seek to balance optimism about the company’s fundamentals with prudence against possible sector headwinds or broader market corrections.

Sector and Market Context

The automobile sector has been navigating a complex environment marked by fluctuating raw material costs, regulatory changes, and evolving consumer demand. TVS Motor’s outperformance relative to its sector peers and the broader Sensex suggests resilience, yet the options market activity highlights that investors remain vigilant.

Put option interest often rises ahead of earnings announcements, macroeconomic data releases, or geopolitical developments that could impact market sentiment. Given the expiry date in late February, traders may be positioning ahead of expected corporate updates or broader market catalysts.

Investor Takeaway

For investors, the heightened put option activity in TVS Motor signals a need for caution despite the company’s strong fundamentals and recent upgrades. Those holding long positions might consider protective strategies such as buying puts or employing collars to mitigate downside risk. Conversely, speculative traders may view the elevated put volumes as an opportunity to capitalise on potential volatility or price corrections.

Long-term investors should weigh the company’s robust market cap, improved Mojo Score, and sector leadership against the near-term technical signals and options market sentiment. A balanced approach that monitors upcoming earnings, sector developments, and macroeconomic indicators will be prudent.

Conclusion

TVS Motor Company Ltd’s position as the most active stock in put options trading ahead of the 24 February expiry underscores a nuanced market outlook. While the company enjoys a Buy rating and solid fundamentals, the options market reveals a layer of caution and hedging among investors. This dynamic highlights the importance of integrating options market data with fundamental and technical analysis to form a comprehensive investment view.

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