Waaree Energies Sees Heavy Put Option Activity Amid Sharp Price Decline

Put Option Activity Highlights

On 25 February 2026, Waaree Energies Ltd (underlying symbol: WAAREEENER) emerged as the most active stock in put options trading, with multiple strike prices attracting substantial volumes. The expiry date for these options is 30 March 2026, providing a near-term horizon for market participants' positioning.

The most heavily traded put option was at the ₹2,500 strike price, with 4,620 contracts exchanged, generating a turnover of approximately ₹1,078.3 lakhs and an open interest of 1,314 contracts. This was closely followed by the ₹2,600 strike, which saw 3,435 contracts traded, turnover of ₹1,083.3 lakhs, and open interest of 890 contracts.

Other notable strike prices included ₹2,700 with 1,893 contracts traded (turnover ₹724.6 lakhs, open interest 741), ₹2,300 with 1,989 contracts (turnover ₹207.8 lakhs, open interest 541), and ₹2,100 with 1,697 contracts (turnover ₹77.7 lakhs, open interest 773). The underlying stock price at the time stood at ₹2,617, indicating that the put strikes are positioned both near and below the current market price, suggesting a range of bearish hedging strategies.

Market Performance and Volatility

Waaree Energies Ltd has experienced a sharp decline of 14.38% on the day, significantly underperforming its sector which fell by only 0.71%, while the Sensex gained 0.57%. The stock opened with a gap down of 6.76% and touched an intraday low of ₹2,570, representing a 15% drop from previous levels. This volatility is underscored by a 6.73% intraday price movement calculated from the weighted average price, with heavier volume traded near the day's low, indicating selling pressure.

The stock has also fallen below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a bearish technical trend. Investor participation has risen sharply, with delivery volumes on 24 February reaching 7.3 lakh shares, an increase of 118.21% compared to the five-day average, reflecting heightened trading interest amid the sell-off.

Investor Sentiment and Hedging Implications

The concentration of put option volumes at strikes ranging from ₹2,100 to ₹2,700, particularly clustered around ₹2,500 and ₹2,600, suggests that market participants are positioning for downside risk or seeking protection against further declines. The open interest figures reinforce this view, with over 1,300 contracts outstanding at the ₹2,500 strike alone.

Given the underlying price of ₹2,617, the ₹2,500 and ₹2,600 strikes are close to the money, indicating that traders may be hedging existing long positions or speculating on a near-term correction. The sizeable turnover in these strikes, exceeding ₹1,000 lakhs each, points to active institutional involvement or large traders adjusting portfolios amid the stock’s recent volatility.

Fundamental and Technical Context

Waaree Energies Ltd operates within the Other Electrical Equipment industry and holds a mid-cap market capitalisation of approximately ₹74,464.48 crores. The company’s Mojo Score has improved to 78.0, reflecting an upgrade from Hold to Buy on 9 December 2025, signalling positive fundamental momentum. However, the current market action and option activity reveal a disconnect, with traders evidently cautious about near-term price stability.

Technically, the stock’s breach of all major moving averages and the sharp intraday decline after three consecutive days of gains indicate a potential trend reversal. The rising delivery volumes and high intraday volatility further confirm that investors are actively repositioning, possibly in response to broader sector weakness or company-specific developments.

Broader Market and Sector Comparison

While Waaree Energies has suffered a steep 14.38% loss on the day, the Other Electrical Equipment sector declined by a modest 0.71%, and the Sensex actually gained 0.57%. This divergence highlights company-specific pressures or profit-taking that have intensified bearish sentiment in the stock.

The stock’s liquidity remains robust, with a trade size capacity of approximately ₹8.86 crores based on 2% of the five-day average traded value, ensuring that investors can execute sizeable trades without significant market impact. This liquidity, combined with the active options market, provides ample opportunity for both hedging and speculative strategies.

Outlook and Investor Considerations

Investors should closely monitor the evolving put option open interest and volume patterns as the 30 March 2026 expiry approaches. The heavy put activity at strikes near the current price suggests that downside protection is a priority, but it may also indicate potential support levels if these options are exercised or rolled over.

Given the recent downgrade in price momentum and technical indicators, cautious investors might consider hedging long positions or waiting for clearer signs of trend stabilisation before committing further capital. Conversely, those with a bullish outlook may view the current weakness and elevated put premiums as an opportunity to enter at more attractive valuations, supported by the company’s improved Mojo Grade and fundamental strength.

Summary

Waaree Energies Ltd’s pronounced put option activity ahead of the March expiry, combined with its sharp price decline and technical weakness, underscores a market environment fraught with uncertainty and bearish sentiment. While the company’s fundamentals and upgraded rating provide a positive backdrop, the near-term outlook remains clouded by volatility and investor caution. Market participants should weigh these factors carefully when formulating their trading or investment strategies.

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