Vedanta Ltd Sees Surge in Put Option Activity Amidst Bullish Price Momentum

Vedanta’s Recent Price Performance and Market Context

Vedanta Ltd. (NSE: VEDL) has been on a robust upward trajectory, hitting a new 52-week and all-time high of ₹737 on 28 January 2026. The stock outperformed its sector by 1.98% on the day, closing with a gain of 4.34%, significantly ahead of the Metal - Non Ferrous sector’s 2.81% rise and the Sensex’s modest 0.43% advance. Over the past five trading sessions, Vedanta has delivered a cumulative return of 9.33%, reflecting strong investor confidence.

Technical indicators further reinforce this bullish momentum. Vedanta is trading comfortably above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling sustained upward strength. Additionally, delivery volumes surged to 1.19 crore shares on 27 January, a 44.41% increase over the five-day average, indicating rising investor participation and conviction.

With a market capitalisation of ₹2,83,425 crore, Vedanta remains a large-cap heavyweight in the Non-Ferrous Metals industry. The stock also offers an attractive dividend yield of 3.26% at current prices, adding to its appeal for income-focused investors.

Surge in Put Option Activity: Strike Price and Expiry Analysis

Despite Vedanta’s bullish price action, the options market reveals a contrasting narrative. The most active put option contract is the 700 strike price expiring on 24 February 2026. This contract saw 2,773 contracts traded on 28 January, generating a turnover of ₹59.31 crore (593.1447 lakhs) and an open interest of 1,453 contracts. The underlying stock price at the time was ₹734.15, indicating that the 700 strike puts are trading slightly out-of-the-money.

The heavy put option volume at this strike suggests that market participants are either hedging their long positions or speculating on a potential near-term correction. The open interest figure, while not extraordinarily high, is significant enough to indicate meaningful positioning ahead of the February expiry. This expiry is less than a month away, which may be prompting traders to establish protective puts as a risk management strategy amid recent volatility in commodity prices and global macroeconomic uncertainties.

Investor Sentiment: Hedging or Bearish Bets?

The coexistence of strong price gains and elevated put option activity points to a nuanced investor sentiment. On one hand, the stock’s technical strength and fundamental backdrop, supported by a Mojo Score of 75.0 and a current Mojo Grade of Buy (downgraded from Strong Buy on 13 January 2026), underpin a positive medium-term outlook. On the other hand, the surge in put contracts at the 700 strike price reveals a cautious stance, possibly reflecting concerns over near-term profit-taking or external risks such as commodity price fluctuations, regulatory changes, or geopolitical tensions impacting the metals sector.

Such put buying can also be interpreted as a hedging mechanism by institutional investors seeking to protect gains accumulated over the past weeks. The 4.37% one-day return for Vedanta compared to the sector’s 2.14% and Sensex’s 0.43% gains further supports the likelihood of profit protection strategies being employed.

Sector and Market Comparison

Within the Non-Ferrous Metals sector, Vedanta’s performance has been exemplary, outpacing peers and the broader market. The sector itself has gained 2.81% on the day, buoyed by rising demand forecasts and improving commodity fundamentals. Vedanta’s liquidity profile is robust, with the stock’s average traded value supporting trade sizes up to ₹28.05 crore without significant market impact, making it a preferred choice for large institutional trades and option strategies.

Vedanta’s market cap grade of 1 confirms its status as a large-cap stock with high market participation and analyst coverage. The recent downgrade from Strong Buy to Buy by MarketsMOJO on 13 January 2026 reflects a slight moderation in momentum but maintains a positive stance based on fundamentals and technicals.

Implications for Investors and Traders

For investors, the current scenario presents a dual narrative. The strong price momentum and positive fundamentals suggest that Vedanta remains a compelling buy within the metals space, especially given its attractive dividend yield and large-cap stability. However, the elevated put option activity at the 700 strike price signals that caution is warranted in the short term.

Traders and option strategists may view the put buying as an opportunity to implement hedging strategies or to speculate on a potential pullback. The proximity of the February expiry adds time sensitivity to these positions, with volatility expected to remain elevated as expiry approaches.

Long-term investors should monitor the evolving macroeconomic environment and commodity price trends closely, as these factors will heavily influence Vedanta’s performance and option market dynamics in the coming months.

Conclusion

Vedanta Ltd. exemplifies the complexity of market sentiment where strong bullish price action coexists with significant put option activity. This duality reflects a market balancing optimism about the company’s prospects with prudent risk management amid uncertain external conditions. Investors and traders alike should consider both the fundamental strength and the hedging signals embedded in the options market when making decisions on Vedanta stock.

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