H&M Options Show Bearish Tilt as Put Volume Nearly Doubles Calls

Options market activity for Hennes & Mauritz (HMb) on Monday revealed a distinctly bearish sentiment among traders, with put options trading at nearly twice the volume of calls. The session's activity underscores near-term caution surrounding the retailer's stock, which closed down 1.1% at SEK 162.50.

Heavy Put Volume Dominates Trading

Data from the session showed significant defensive positioning in H&M options. A total of 14,185 contracts were traded, culminating in a put-to-call ratio of 1.97, according to Investing.com. A ratio significantly above 1.0 typically indicates that traders are buying more downside protection (puts) than upside bets (calls).

The most significant trade of the day accounted for 56% of the total volume. This involved a trader rolling an existing, in-the-money put position with a SEK 167 strike price out by one week to a new contract with a SEK 165 strike. This type of trade, known as a diagonal put spread, suggests an investor with an existing bearish view is extending their hedge against further price declines rather than closing the position.

Long-Term Bulls Emerge Cautiously

While the near-term outlook appeared defensive, some bullish activity was noted in longer-dated contracts. A few notable trades included the purchase of out-of-the-money calls, signaling bets on a potential recovery over a multi-month horizon.

Key bullish trades identified by Investing.com include:

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• 2,000 call contracts at the SEK 165 strike expiring September 25, 2026.
• 850 call contracts at the SEK 190 strike expiring March 19, 2027, a bet on a roughly 17% rally.
• 750 call contracts at the SEK 170 strike expiring June 18, 2027.

These trades represent a more constructive long-term view, contrasting sharply with the immediate hedging seen in the put market.

Technicals and Volatility Reinforce Caution

The bearish options flow is supported by the stock's technical posture and volatility metrics. The volatility skew, which measures the relative cost of puts versus calls, rose by 1.35 percentage points. This indicates that demand for downside protection is increasing, making puts more expensive relative to calls.

Furthermore, technical indicators for H&M registered a "Strong Sell" signal on both daily and weekly timeframes, as reported by Investing.com. The stock is trading near the lower end of its 52-week range and closed Monday's session on a key technical support level of SEK 162.0, making its subsequent price action critical for market direction.