Overview of Put Option Activity
Data from the derivatives market reveals that Vedanta Ltd. (stock symbol: VEDL) has witnessed substantial volumes in put options expiring on 30 December 2025. The two most actively traded strike prices are ₹520 and ₹530, with 2,254 and 3,187 contracts traded respectively. The turnover for these strikes stands at ₹13.19 crores for the ₹520 strike and ₹29.58 crores for the ₹530 strike, indicating strong investor interest in downside protection or speculative bearish bets.
Open interest figures further underline this trend, with 2,938 contracts outstanding at the ₹520 strike and 1,987 at ₹530. These levels of open interest suggest that traders are maintaining or building positions at these strikes, potentially anticipating price movements or seeking to hedge existing exposures.
Price Context and Market Positioning
Vedanta’s underlying share price was recorded at ₹537.30, placing it just above the active put strike prices. The stock is trading close to its 52-week high, being only 1.14% away from the peak of ₹543. Despite this proximity to the high, the stock underperformed its sector on the day, lagging by 1.77% compared to the non-ferrous metals sector’s gain of 2.78%.
Over the past four consecutive trading sessions, Vedanta has delivered a cumulative return of 5.02%, reflecting a steady upward trend. The stock’s price has also remained above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a generally bullish technical backdrop.
Investor Participation and Liquidity
Despite the recent gains, investor participation appears to have moderated. Delivery volume on 11 December was 55.46 lakh shares, which is 12.62% lower than the five-day average delivery volume. This decline in participation may indicate some hesitation among investors or profit-booking after the recent rally.
Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to approximately ₹12.15 crore based on 2% of the five-day average traded value. This level of liquidity is conducive to active trading in both the cash and derivatives segments.
Perfect timing to enter! This Small Cap from IT - Software just turned profitable with growth momentum clearly building up. Get in before the broader market notices!
- - New profitability achieved
- - Growth momentum building
- - Under-the-radar entry
Implications of Put Option Concentration
The concentration of put option activity at ₹520 and ₹530 strikes, both below the current market price, suggests that traders may be positioning for a potential pullback or are seeking downside protection. Put options serve as a hedge against price declines, and elevated open interest at these strikes can indicate market participants’ caution or anticipation of volatility.
Given that the stock is trading near its yearly highs, the active put strikes may represent key support levels where investors expect the price to find a floor. The expiry date of 30 December 2025 also aligns with the end of the calendar year, a period often associated with portfolio rebalancing and risk management activities.
Sector and Market Comparison
Vedanta operates within the non-ferrous metals industry, a sector that has recorded a 2.78% gain recently, outperforming the stock’s 1.62% return on the day. The broader Sensex index posted a 0.51% increase, placing Vedanta’s performance between the benchmark and its sector peers.
The company’s market capitalisation stands at ₹2,06,957 crore, categorising it as a large-cap stock. This scale typically attracts institutional interest and contributes to the stock’s liquidity and option market activity.
Dividend Yield and Investor Appeal
Vedanta offers a dividend yield of 5.95% at the current price level, which may appeal to income-focused investors. This yield is relatively high compared to many peers in the metals sector, potentially supporting the stock’s valuation despite recent fluctuations.
Curious about Vedanta . from Non - Ferrous Metals? Get the complete picture with our detailed research report covering fundamentals, technicals, peer analysis, and everything you need to decide!
- - Detailed research coverage
- - Technical + fundamental view
- - Decision-ready insights
Outlook and Considerations for Investors
While Vedanta’s recent price trajectory has been positive, the notable put option activity at strikes below the current market price signals a degree of caution among traders. This could reflect expectations of near-term volatility or a desire to hedge existing long positions ahead of the year-end expiry.
Investors should monitor the stock’s price action relative to these strike levels, as a breach below ₹530 or ₹520 could trigger increased option-related activity and influence market sentiment. Conversely, sustained strength above these levels may reduce downside pressure and support further gains.
Given the stock’s liquidity and sizeable market capitalisation, Vedanta remains a key focus within the non-ferrous metals sector, with option market dynamics providing valuable insights into investor positioning and risk management strategies.
Summary
Vedanta Ltd. is currently experiencing significant put option trading interest at the ₹520 and ₹530 strikes for the December 2025 expiry. This activity, combined with the stock’s proximity to its 52-week high and recent price gains, suggests a complex interplay of bullish momentum and cautious hedging. Market participants appear to be balancing optimism with protective measures, reflecting the nuanced outlook for this large-cap metals company as the year draws to a close.
Only for Rs. 14,999 - Get Access to 2 Years + 6 Months of All Premium Features on MarketsMojo. As low as ₹500/month! Claim 83% OFF →
