Vodafone Idea Sees Surge in Put Option Activity Amid Bearish Sentiment

Intense Put Option Trading at Critical Strike Prices

On 2 January 2026, Vodafone Idea Ltd. (IDEA) recorded substantial put option volumes for the expiry dated 27 January 2026. The most actively traded put contracts were at the ₹11.0 and ₹10.0 strike prices, with 2,305 and 1,785 contracts traded respectively. The turnover for these strikes was significant, amounting to ₹395.40 lakhs for the ₹11.0 strike and ₹114.82 lakhs for the ₹10.0 strike. Open interest figures further underscore the bearish sentiment, with 4,607 contracts open at ₹11.0 and 4,899 at ₹10.0, indicating sustained investor interest in downside protection or speculative short positions.

The underlying stock price stood at ₹11.93, placing these strike prices just below the current market value, which suggests that traders are positioning for a potential decline or increased volatility in the near term. The concentration of put activity near the money is a classic indicator of hedging strategies or outright bearish bets, reflecting market participants’ concerns about the stock’s near-term trajectory.

Underlying Equity Performance and Market Context

Interestingly, Vodafone Idea Ltd. has outperformed its sector on the day, registering a 2.59% gain compared to the Telecom - Services sector’s 0.65% and the Sensex’s 0.32%. The stock has also been on a two-day winning streak, delivering an 11.43% return over this period. It is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling short to long-term bullish momentum in the underlying equity.

Investor participation has notably increased, with delivery volumes on 1 January reaching 46.13 crore shares, an 86.29% rise over the five-day average. Liquidity remains robust, supporting trade sizes up to ₹40.73 crore based on 2% of the five-day average traded value. This liquidity backdrop facilitates active options trading and allows for efficient execution of hedging or speculative strategies.

Mojo Score and Recent Rating Changes

Despite the recent price strength, Vodafone Idea Ltd. carries a Mojo Score of 46.0, categorised as a Sell grade as of 17 October 2025, downgraded from a previous Strong Sell. The company’s market capitalisation stands at ₹1,25,895 crore, placing it in the mid-cap segment. The downgrade reflects concerns over the company’s fundamentals and sector headwinds, which may be driving the increased put option interest as investors seek downside protection.

Bearish Positioning Amid Sector Challenges

The telecom services sector continues to face regulatory pressures, competitive intensity, and margin compression, factors that weigh heavily on Vodafone Idea Ltd.’s outlook. The surge in put option activity at strikes below the current market price suggests that investors are either hedging existing long positions or speculating on a potential pullback.

Open interest data reveals that the ₹10.0 strike has the highest open interest among puts, indicating a strong support level that traders are watching closely. Should the stock breach this level, it could trigger further downside momentum. Conversely, the stock’s recent outperformance and rising moving averages imply that bulls remain active, creating a tug-of-war scenario between optimism and caution.

Expiry Patterns and Investor Sentiment

The January 27 expiry is attracting significant attention, with put volumes concentrated at strikes near the money. This pattern is typical ahead of quarterly expiries when traders adjust positions based on updated earnings expectations, macroeconomic data, or sector developments. The heavy put activity may also reflect hedging against potential volatility spikes or adverse news flow in the coming weeks.

Given Vodafone Idea Ltd.’s mid-cap status and recent mojo downgrade, investors are advised to monitor open interest changes and price action closely. A sustained increase in put open interest coupled with declining stock prices could signal a shift towards a more bearish consensus, while a drop in put interest might indicate easing concerns.

Implications for Investors and Traders

For investors holding Vodafone Idea Ltd. shares, the current options activity suggests prudence. The elevated put volumes at strikes close to the market price imply that downside risk is being actively managed. Traders may consider protective put strategies or closely monitor the stock’s technical support levels to mitigate potential losses.

Speculators might view the heavy put interest as an opportunity to capitalise on volatility, either through buying puts to benefit from a decline or selling puts to collect premium if confident in the stock’s resilience. However, given the company’s recent mojo downgrade and sector headwinds, a cautious approach is warranted.

Looking Ahead

Vodafone Idea Ltd.’s stock performance and options market activity will remain under scrutiny as the January expiry approaches. Key levels to watch include the ₹10.0 and ₹11.0 strikes, which currently anchor much of the put open interest. Any decisive move below these levels could accelerate bearish momentum, while a sustained rally above ₹12.0 may alleviate some downside concerns.

Investors should also keep an eye on broader telecom sector developments, regulatory announcements, and company-specific news that could influence sentiment and option positioning. The interplay between the underlying equity’s recent gains and the persistent put option interest creates a complex risk-reward scenario that demands careful analysis.

Conclusion

Vodafone Idea Ltd. is at a critical juncture where bullish price action coexists with significant bearish hedging in the options market. The heavy put option activity at near-the-money strikes ahead of the January expiry reflects investor caution amid a challenging telecom environment and a recent downgrade in the company’s mojo rating. While the stock’s recent outperformance and strong moving averages offer some optimism, the elevated put open interest signals that downside risks remain a key concern for market participants.

Investors and traders should closely monitor open interest trends, price movements, and sector developments to navigate this nuanced landscape effectively.

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