Axis Bank Sees Heavy Put Option Activity Amid Bullish Price Momentum

Robust Stock Performance Contrasted by Elevated Put Option Interest

Axis Bank’s share price has demonstrated strong momentum, trading above all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. The stock’s market capitalisation stands at a substantial ₹3,95,605 crore, categorising it firmly as a large-cap entity within the private sector banking industry. On 14 January 2026, the stock recorded an intraday high of ₹1,305.9, marking a fresh 52-week peak and delivering a 3.48% gain for the day. This performance notably outpaced the sector’s modest 0.06% rise and the Sensex’s 0.17% gain.

However, despite this bullish price action, the put options market tells a more nuanced story. The most actively traded put options for Axis Bank are concentrated at strike prices of ₹1,260 and ₹1,280, both expiring on 27 January 2026. These strikes are positioned slightly below the current underlying value of ₹1,303.4, indicating that traders are seeking downside protection or speculating on a potential pullback.

Detailed Put Option Activity Highlights Bearish Positioning

The put option with a ₹1,280 strike price saw the highest volume, with 5,493 contracts traded, generating a turnover of approximately ₹483.38 lakhs. Open interest at this strike stands at 2,833 contracts, signalling sustained interest and potential accumulation of bearish bets. The ₹1,260 strike put also attracted significant activity, with 4,861 contracts traded and a turnover of ₹296.22 lakhs, alongside an open interest of 2,402 contracts.

This concentrated activity at strikes below the current market price suggests that investors are either hedging long positions or speculating on a correction in the near term. The expiry date of 27 January 2026 is just under two weeks away, which often leads to heightened options activity as traders adjust their portfolios ahead of expiry.

Investor Sentiment and Delivery Volumes Signal Caution

While the stock’s price action remains robust, delivery volumes have shown a decline, with 33.13 lakh shares delivered on 13 January 2026, down by 17.86% compared to the five-day average. This reduction in investor participation could indicate a wait-and-watch approach, with market participants possibly awaiting clearer signals before committing further capital.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting a trade size of approximately ₹14.21 crore based on 2% of the five-day average. This liquidity ensures that both institutional and retail investors can execute sizeable positions without significant market impact.

Mojo Score and Rating Reflect a Hold Stance Amid Mixed Signals

MarketsMOJO assigns Axis Bank a Mojo Score of 58.0, categorising it with a Hold grade as of 15 October 2025, an upgrade from a previous Sell rating. This reflects a cautious optimism based on the bank’s fundamentals and recent price strength, balanced against potential near-term risks highlighted by options market activity and delivery volume trends.

The bank’s Market Cap Grade is rated 1, underscoring its status as a large-cap stock with significant market presence. Investors should weigh these factors carefully, considering both the strong technicals and the hedging activity evident in the options market.

Expiry Patterns and Strategic Implications for Investors

The concentration of put option activity at strikes ₹1,260 and ₹1,280 expiring on 27 January 2026 suggests that market participants are positioning for a potential downside or volatility spike in the short term. This pattern is typical ahead of monthly expiry dates when traders adjust hedges or speculate on price movements.

For long-term investors, this elevated put activity may serve as a cautionary signal to monitor price action closely and consider protective strategies such as stop-loss orders or option-based hedges. Conversely, traders with a bullish outlook might view the current premium in put options as an opportunity to sell puts and generate income, assuming the stock maintains its upward trajectory.

Given Axis Bank’s strong fundamentals and recent upgrade in rating, the stock remains a key player in the private sector banking space. However, the mixed signals from the options market and declining delivery volumes warrant a balanced approach to position sizing and risk management.

Comparative Sector and Market Context

Within the private sector banking industry, Axis Bank’s performance stands out, especially when compared to the sector’s marginal gains on the day of analysis. The Sensex’s modest 0.17% rise further highlights Axis Bank’s relative strength. Yet, the options market activity suggests that some investors are bracing for a potential correction or increased volatility, a dynamic that is not uncommon in large-cap banking stocks given their sensitivity to macroeconomic factors and regulatory developments.

Investors should also consider broader market conditions, including interest rate trends, credit growth outlook, and asset quality metrics, which can influence banking sector valuations and risk perceptions.

Conclusion: Balanced Outlook with Tactical Vigilance Recommended

Axis Bank Ltd. continues to demonstrate robust price performance backed by solid fundamentals and a recent upgrade in its Mojo Grade to Hold. However, the surge in put option volumes at strikes below the current market price, coupled with declining delivery volumes, signals a degree of caution among market participants. This dichotomy suggests that while the bank remains fundamentally sound, near-term volatility or price corrections cannot be ruled out.

Investors and traders alike should adopt a balanced approach, leveraging technical indicators, options market signals, and fundamental analysis to navigate the evolving landscape. Protective hedging strategies may be prudent for those with significant exposure, while opportunistic traders might capitalise on elevated option premiums.

As expiry approaches on 27 January 2026, monitoring open interest changes and price movements will be critical to gauge market sentiment and adjust positions accordingly.

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