A sharp fall in Policybazaar parent PB Fintech’s shares on September 24 created one such opportunity for traders holding bearish positions in the futures and options (F&O) segment.
PB Fintech shares plunged around 35% during the session, triggering a sharp rise in the value of put options. The stock’s market capitalisation fell by around ₹30,000 crore in a single day.
How did ₹9,450 become ₹1.31 lakh?
When a stock falls sharply, its put option can rise significantly in value because a put gives the buyer the right to sell the stock at a predetermined price.
The trade involved the 1,600 put option (PE). A put option generally gains in value when the underlying stock falls, making it a way for traders to take a bearish position.
For example, if PB Fintech falls from around ₹1,600 to ₹1,200, a ₹1,600 put becomes more valuable because it allows the holder to sell at ₹1,600 when the market price is only ₹1,200. This can result in the option premium rising much faster than the stock itself falls. In PB Fintech’s case, the ₹1,600 put premium rose from ₹27 to ₹376.
According to the figures provided, the 1,600 PE was available at ₹27 in the morning, with a lot size of 350 shares.
So, the amount required to buy one lot was:
By the end of the session, the option closed at ₹376. Therefore, the value of one lot at the closing price was:
₹376 × 350 = ₹1,31,600
This means an initial outlay of ₹9,450 would have risen to ₹1,31,600, translating into a gain of ₹1,22,150, before brokerage, taxes and other trading costs.
The sharp move was driven by the steep fall in PB Fintech shares, which significantly increased the value of its September put contracts.
PB Fintech falls 35% on Thursday
PB Fintech shares plunged to their lowest level since March 2025 after the Insurance Regulatory and Development Authority of India (IRDAI) proposed changes to insurance distributor commissions, with payouts to be linked to factors such as product complexity, distribution channel, policy size and the effort involved in sales and servicing.
The stock breached multiple circuit limits during Thursday’s session before closing at ₹1,207 on the NSE, its 52-week low. It marked the sharpest single-day decline since PB Fintech’s listing in November 2021. The selloff erased more than ₹31,426 crore from its market capitalisation, which stood at ₹55,863.51 crore at the close.
IRDAI’s consultation paper also proposed reintroducing commission caps across life, health and motor insurance, after the limits were removed in 2023.
For PB Fintech, the key concern was the potential impact on its general insurance business. Co-founder and Group CEO Yashish Dahiya told analysts on September 24 that the proposed commission framework could bring revenue from general insurance down to between one-third and 40% of current levels.
Dahiya said the changes could severely affect the company’s non-life insurance business, potentially leading to tighter spending and slower hiring. The regulatory proposals could also force PB Fintech to reassess the pace and nature of its expansion, according to a Reuters report cited in the details shared.
PB Fintech, founded in 2008 and headquartered in Gurugram, is the parent of Policybazaar and Paisabazaar.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
