Put Option Activity Highlights
On 29 December 2025, Vedanta's put options with a strike price of ₹600 emerged as the most actively traded contracts. A total of 4,485 contracts exchanged hands, generating a turnover of approximately ₹54.67 lakhs. The open interest stood at 1,848 contracts, indicating a substantial build-up of positions as the expiry date approaches.
The underlying stock price was recorded at ₹612.90, marginally above the ₹600 strike, suggesting that these puts are positioned close to the money. This proximity often signals a strategic use of options either for downside protection or speculative bearish bets.
Price Performance and Market Context
Vedanta's stock price has demonstrated notable strength in recent weeks. The share touched a new 52-week and all-time high of ₹614.40 during intraday trading, marking a 2.24% rise on the day. Over the past 14 trading sessions, the stock has delivered a cumulative return of 20.1%, reflecting sustained buying interest.
Despite this robust performance, Vedanta underperformed its sector on the day by 0.35%, with the Non-Ferrous Metals sector gaining 2.32%. The stock's one-day return was 1.86%, compared to the sector's 2.52% and the Sensex's modest 0.11% gain.
Technical indicators show Vedanta trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, underscoring a strong upward trend. This technical backdrop contrasts with the heavy put option activity, highlighting a nuanced market outlook.
Investor Participation and Liquidity
Investor participation metrics reveal a decline in delivery volumes, with 57.51 lakh shares delivered on 26 December 2025, down 21.6% from the five-day average. This reduction may indicate a shift in trading behaviour, possibly towards more short-term or derivative-based strategies.
Liquidity remains adequate for sizeable trades, with the stock's average traded value supporting transactions up to ₹16.87 crore based on 2% of the five-day average. The current dividend yield stands at 3.83%, adding an income component to the stock's appeal.
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Interpreting the Put Option Surge
The concentration of put option activity at the ₹600 strike price, just below the current market price, suggests that investors may be employing these contracts as a hedge against potential near-term downside risks. This is a common practice among holders of the underlying stock who seek to protect gains amid market volatility.
Alternatively, the elevated open interest and turnover in puts could indicate speculative positioning by traders anticipating a price correction or increased volatility around the expiry date. The expiry on 30 December 2025 is imminent, which often leads to heightened options activity as market participants adjust or close positions.
Sector and Market Dynamics
The Non-Ferrous Metals sector, to which Vedanta belongs, has shown positive momentum with a 2.32% gain on the day. Vedanta's market capitalisation stands at ₹2,39,374.40 crore, categorising it as a large-cap stock with significant influence in the sector.
While Vedanta's recent price gains reflect favourable market conditions, the divergence between the stock's performance and the surge in put option interest highlights a cautious undertone among some investors. This duality may stem from concerns over commodity price fluctuations, regulatory developments, or broader macroeconomic factors impacting the metals industry.
Technical and Fundamental Considerations
Vedanta's trading above all major moving averages signals a strong technical foundation. However, the falling delivery volumes suggest that some investors might be shifting towards derivative instruments for exposure or risk management.
The stock's dividend yield of 3.83% provides an attractive income stream, which may support investor interest despite short-term uncertainties. The liquidity profile ensures that the stock remains accessible for both institutional and retail investors seeking to execute sizeable trades.
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Outlook and Investor Implications
Investors monitoring Vedanta should consider the implications of the heavy put option activity in the context of the stock’s recent price strength and sector performance. The options market data points to a degree of caution or hedging, which may reflect expectations of near-term volatility or profit-taking.
Given the stock’s position above key moving averages and its dividend yield, Vedanta remains a significant player in the Non-Ferrous Metals space. However, the interplay between strong price momentum and elevated put interest warrants close observation for shifts in market sentiment.
Market participants may find value in analysing both the underlying fundamentals and the derivative market signals to gauge potential price movements and risk management strategies.
Summary
Vedanta Ltd. has experienced a notable surge in put option trading at the ₹600 strike price ahead of the 30 December 2025 expiry, with 4,485 contracts traded and open interest at 1,848. This activity contrasts with the stock’s recent rally to a 52-week high of ₹614.40 and a 20.1% gain over 14 days. The divergence suggests a blend of hedging and speculative positioning amid a broadly positive sector environment. Investors should weigh these factors carefully as they assess Vedanta’s near-term prospects.
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