Sensex Put Options spike 50x in minutes, traders stunned

On Thursday, social media was abuzz with an unusual spike in the premium of Sensex put option, particularly in the final minutes of trading. Multiple traders flagged the anomaly, questioning how deep out-of-the-money (OTM) puts could suddenly surge in value despite no major movement in the underlying index.

One trader, Sarang Sood, on wrote on X: “If Rs 1 lakh invested in the Sensex 83,000 PE today at 2:55 pm became Rs 50 lakh at 2:58 pm, that’s 50x in three minutes. This is the power of mathematics.”

Another trader Raj Pawan Gumdal shared a similar experience on X, saying: “What just happened?! At 14:58, SENSEX moved only ~40 points (84,546 → 84,508) but the 83,400 PE blasted from Rs 1.15 to Rs 45.5 — 45x in under a minute. I was short and my SL got hit instantly. Why remove weekly expiries for this?”

Another user Arindam Raha, posted a chart with the caption “SENSEX OPTION MANIPULATION,” showing a sharp needle-like spike near the close. While some traders labelled the move as manipulation, others speculated whether it could have been a technical glitch. But most agreed they had no clarity on what triggered the sudden jump.

Derivatives trader Mayank Bansal offered a possible explanation: “The up-move in the price of deep OTM puts could have been triggered by a fat-finger trade, which in turn may have set off a series of cascading stop-losses of those shorting the put option, further exaggerating the move. Fat-finger trades are not uncommon and do happen inadvertently from time to time.”

A market participant said the issue was quickly flagged to the exchange. “The exchange’s surveillance team is analysing the data, but it is certain that there was no technical glitch on the exchange’s end,” the person said. “Sometimes, due to high volatility, such moves occur because of demand and supply imbalances.”

Moneycontrol reached out to BSE for a comment, but the exchange declined to respond.