Wipro Ltd Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

On 19 January 2026, Wipro’s put options with a strike price of ₹240 expiring on 27 January 2026 emerged as the most actively traded contracts in the segment. A total of 6,091 contracts changed hands, generating a turnover of ₹54.27 crores. The open interest for these puts stands at 1,838 contracts, indicating sustained interest and potential accumulation of bearish bets or protective hedges.

The underlying stock price at the time was ₹247.45, placing the ₹240 strike slightly out-of-the-money but within close proximity, which often attracts traders anticipating a near-term decline or seeking downside protection.

Market Performance and Technical Weakness

Wipro’s stock performance on the day was notably weak, underperforming its sector by 6.85% and the broader Sensex by 7.11%. The stock opened with a gap down of 5.78% and touched an intraday low of ₹241.55, marking a steep 9.68% decline from previous levels. The weighted average traded price skewed towards the day’s low, underscoring selling pressure.

Technically, Wipro is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish trend across multiple timeframes. This technical deterioration likely fuels the increased put option interest as traders position for further downside or hedge existing long exposures.

Investor Participation and Liquidity

Investor participation has risen sharply, with delivery volumes on 16 January reaching 51.14 lakh shares, a 63.99% increase over the five-day average. This heightened activity suggests that institutional and retail investors alike are actively repositioning their portfolios amid the stock’s volatility.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹3.65 crores comfortably, facilitating efficient execution of large option and equity trades.

Fundamental and Market Context

Wipro Ltd. is a large-cap company with a market capitalisation of approximately ₹2,80,262 crores, operating in the Computers - Software & Consulting industry. The company holds a favourable Mojo Score of 75.0 and was recently upgraded from a Hold to a Buy rating on 13 January 2026, reflecting improved fundamentals and growth prospects.

Despite the recent downgrade in short-term price action, Wipro offers a relatively high dividend yield of 4.11%, which may provide some cushion to investors amid volatility. However, the current market sentiment appears cautious, as evidenced by the heavy put option volumes and the stock’s technical weakness.

Expiry Patterns and Investor Strategies

The concentration of put option activity at the ₹240 strike price with expiry on 27 January 2026 suggests that traders are positioning for a potential near-term correction or are hedging existing long positions against downside risk. The open interest level of 1,838 contracts indicates that this is not merely speculative but a significant positioning move.

Such activity often precedes volatility around expiry dates, as market participants adjust their portfolios in response to evolving price dynamics and macroeconomic factors. The proximity of the strike price to the current underlying value also implies that traders expect the stock to test or breach this level in the coming week.

Comparative Sector and Index Performance

On the same trading day, the Computers - Software & Consulting sector declined by 1.25%, while the Sensex fell by 0.52%. Wipro’s sharper decline of 7.63% relative to both benchmarks highlights its vulnerability and the market’s selective bearishness towards the stock. This divergence may be driven by company-specific news, earnings outlook, or broader sector rotation dynamics.

Investors should monitor upcoming corporate announcements and sector trends closely, as these will influence Wipro’s price trajectory and option market activity in the near term.

Implications for Investors

The surge in put option volumes at a strike price close to the current market level signals a cautious or bearish stance among traders and investors. For long-term holders, this may indicate a need to reassess risk exposure or consider protective strategies such as buying puts or employing collars to mitigate downside risk.

Conversely, short-term traders might view this as an opportunity to capitalise on expected volatility or downward momentum, especially given the stock’s technical weakness and underperformance relative to its sector and the broader market.

Given Wipro’s recent upgrade to a Buy rating and strong fundamental backdrop, investors should balance the near-term bearish signals with the company’s longer-term growth prospects and dividend yield, which remain attractive.

Outlook and Next Steps

As the 27 January expiry approaches, market participants will closely watch Wipro’s price action around the ₹240 strike level. A breach below this level could trigger further downside and increased put option exercise, while a rebound may alleviate some bearish pressure.

Investors should also monitor broader market conditions, sector developments, and company-specific news that could influence sentiment and option market dynamics. Maintaining a disciplined approach to risk management will be crucial in navigating the current volatility.

Summary

Wipro Ltd.’s recent spike in put option trading at the ₹240 strike price ahead of the 27 January 2026 expiry reflects a marked increase in bearish positioning and hedging activity. The stock’s underperformance, technical weakness, and rising investor participation underpin this cautious sentiment. While the company’s fundamentals and dividend yield remain supportive, near-term volatility is likely as expiry approaches, warranting close attention from investors and traders alike.

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