Waaree Energies Sees Heavy Put Option Activity Amid Bearish Hedging

Robust Put Option Volumes Highlight Investor Caution

On 22 January 2026, Waaree Energies Ltd (underlying symbol: WAAREEENER) emerged as one of the most actively traded stocks in the put options segment. The strike prices of ₹2,500 and ₹2,600 attracted the highest put option volumes, with 3,935 and 4,156 contracts traded respectively. This translated into a combined turnover exceeding ₹420 lakhs, underscoring substantial investor interest in downside protection or speculative bearish bets.

Open interest figures further reinforce this trend, with 1,142 contracts outstanding at the ₹2,500 strike and 1,149 at ₹2,600, indicating sustained positioning rather than transient trading. The underlying stock price stood at ₹2,694.10, placing these strike prices comfortably below and near the current market level, suggesting that traders are bracing for potential downside or volatility in the near term.

Expiry Patterns and Market Sentiment

The January 27 expiry date is pivotal, as it marks the end of the current monthly options cycle. The concentration of put activity at these strikes suggests a strategic hedging approach by institutional investors or traders anticipating a correction or seeking to capitalise on volatility. The elevated turnover and open interest at these levels imply that market participants are positioning for a possible pullback or are protecting gains after recent price advances.

Stock Performance and Technical Context

Despite the surge in bearish options activity, Waaree Energies Ltd has demonstrated resilience in the cash market. The stock outperformed its sector by 8.11% on the day, registering a robust 12.21% one-day return compared to the Renewable Energy sector’s 2.04% gain and the Sensex’s modest 0.96% rise. It opened with a gap up of 6.04% and touched an intraday high of ₹2,660.90, marking a 10% increase from previous levels.

Technical indicators reveal a nuanced picture. The weighted average price suggests that more volume traded near the low price of the day, hinting at some selling pressure despite the overall gain. The stock price currently trades above its 5-day moving average but remains below its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a potential resistance zone and the possibility of a trend reversal or consolidation phase.

Sectoral and Market Context

Waaree Energies operates within the Other Electrical Equipment industry, a segment that has seen mixed performance amid evolving renewable energy dynamics. The sector’s 1-day return of 1.78% pales in comparison to Waaree’s surge, highlighting the stock’s relative strength. However, the broader market’s cautious tone, reflected in the Sensex’s sub-1% gain, may be influencing the increased put option activity as investors seek to hedge against sector-specific or macroeconomic risks.

Investor Participation and Liquidity Considerations

Investor engagement in Waaree Energies has been on the rise, with delivery volumes reaching 3.65 lakh shares on 21 January, a 23.1% increase over the five-day average. This heightened participation reflects growing conviction or repositioning ahead of the options expiry. The stock’s liquidity profile supports sizeable trades, with a 2% threshold of the five-day average traded value allowing for trade sizes up to ₹7.44 crore, facilitating both institutional and retail activity.

Mojo Score Upgrade and Market Capitalisation

Waaree Energies Ltd’s recent upgrade from a Hold to a Buy rating by MarketsMOJO on 9 December 2025, accompanied by a Mojo Score of 78.0, signals improved fundamentals and positive outlook. The company’s mid-cap market capitalisation stands at ₹78,077.25 crore, placing it among significant players in the Other Electrical Equipment sector. Despite the bullish rating, the surge in put options suggests that investors are balancing optimism with prudent risk management.

Implications for Investors and Traders

The pronounced put option activity at strike prices below and near the current market level suggests that investors are adopting a cautious stance. This may be driven by expectations of short-term volatility or a potential correction following the recent rally. Traders utilising these puts could be hedging existing long positions or speculating on downside moves, while institutional players might be employing complex strategies to manage portfolio risk.

Given the stock’s technical positioning—above short-term moving averages but below longer-term ones—investors should closely monitor price action around key support and resistance levels. The interplay between bullish fundamentals, as reflected in the Mojo upgrade, and bearish options positioning creates a nuanced risk-reward scenario.

Conclusion

Waaree Energies Ltd’s surge in put option volumes ahead of the 27 January expiry highlights a growing appetite for downside protection amid a backdrop of recent price strength and positive fundamental upgrades. While the stock continues to outperform its sector and broader market, the elevated open interest and turnover in puts at ₹2,500 and ₹2,600 strikes indicate that investors are hedging against potential near-term volatility or downside risks. This dynamic underscores the importance of a balanced approach, combining fundamental analysis with vigilant risk management for those invested in this mid-cap electrical equipment player.

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