Axis Bank Sees Heavy Put Option Activity Amid Bullish Price Momentum

Axis Bank’s Recent Market Performance

Axis Bank, a leading private sector bank with a market capitalisation of ₹4,22,780 crores, has been on a notable upward trajectory. The stock hit a new 52-week and all-time high of ₹1,377 on 30 January 2026, outperforming its sector by 1.33% on the day. Over the last four consecutive trading sessions, the share price has appreciated by 9.13%, signalling robust investor confidence. The bank’s price currently trades above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a strong technical setup.

Investor participation has also intensified, with delivery volumes on 29 January reaching 1.2 crore shares, a 56.08% increase over the five-day average. Liquidity remains ample, with the stock supporting trade sizes up to ₹40.49 crores based on 2% of the five-day average traded value. This liquidity profile facilitates active trading and options market activity.

Put Option Activity: Volume, Open Interest and Strike Price

The most active put option for Axis Bank is the contract expiring on 24 February 2026, with a strike price of ₹1,360. On 30 January, this put option saw 4,105 contracts traded, generating a turnover of approximately ₹719.14 lakhs. Open interest stands at 1,276 contracts, indicating sustained interest and potential accumulation of bearish positions or hedges.

The underlying stock price at ₹1,371 is just above the ₹1,360 strike, suggesting that traders are positioning close to the money. This proximity often reflects a cautious stance, where investors may be hedging existing long positions or speculating on a near-term correction. The substantial turnover and open interest at this strike price highlight its significance as a key level for market participants.

Interpreting the Put Option Surge: Hedging or Bearish Sentiment?

Heavy put option volumes can indicate two primary market behaviours: hedging by long investors or outright bearish bets. Given Axis Bank’s recent strong price momentum and technical indicators, the surge in put buying is likely a combination of both.

Long-term investors may be purchasing puts as insurance against a potential pullback after a sharp rally, especially with the stock trading near all-time highs. This protective strategy helps mitigate downside risk while maintaining exposure to further gains. Conversely, some traders may be speculating on a near-term correction, anticipating profit-taking or sector rotation pressures.

It is notable that the bank’s Mojo Score has improved to 67.0, with a Mojo Grade upgrade from Sell to Hold on 15 October 2025. This reflects a more balanced outlook, acknowledging both the bank’s strengths and the risks ahead. The Market Cap Grade remains at 1, confirming its status as a large-cap stock with significant institutional interest.

Expiry Patterns and Market Implications

The 24 February 2026 expiry date is less than a month away, which adds urgency to the positioning. Traders holding puts at ₹1,360 are likely expecting some volatility or a price test near this level before expiry. If the stock remains above the strike, these puts may expire worthless, benefiting option sellers. However, a dip below ₹1,360 could trigger gains for put holders, potentially accelerating selling pressure.

Given the stock’s recent outperformance relative to the Sensex and sector, the options market activity suggests a cautious approach. The sector’s 1-day return was negative at -0.58%, mirroring the Sensex’s decline, while Axis Bank bucked the trend with a 0.59% gain. This divergence may be prompting traders to hedge or speculate accordingly.

Comparative Sector and Market Context

Axis Bank operates within the private sector banking industry, which has seen mixed performance amid macroeconomic uncertainties and evolving regulatory landscapes. While the bank’s fundamentals remain solid, with strong capitalisation and improving asset quality, external factors such as interest rate movements and credit demand fluctuations continue to influence investor sentiment.

Against this backdrop, the active put option interest can be viewed as a prudent risk management tool. Investors are balancing optimism about the bank’s growth prospects with caution over potential market corrections or sector-specific headwinds.

Outlook and Investor Takeaways

For investors, the current options market activity in Axis Bank offers valuable insights. The strong price momentum and technical positioning suggest continued interest from buyers, while the surge in put options signals a healthy degree of caution. This duality is typical in large-cap banking stocks that are navigating a complex macroeconomic environment.

Investors holding long positions may consider protective puts as a risk mitigation strategy, especially with the stock near record highs. Meanwhile, traders looking for opportunities might monitor the ₹1,360 strike level closely, as a breach could trigger increased volatility and potential downside.

Overall, Axis Bank’s upgraded Mojo Grade to Hold reflects a balanced stance, recognising both the bank’s strengths and the risks posed by market fluctuations. The stock’s liquidity and active options market make it a focal point for both institutional and retail investors seeking exposure to India’s private banking sector.

Conclusion

Axis Bank’s prominence in put option trading, particularly at the ₹1,360 strike expiring in late February, highlights a market grappling with optimism tempered by caution. The bank’s recent price gains and technical strength are counterbalanced by significant hedging and bearish positioning in the options market. Investors should weigh these factors carefully, considering both the upside potential and the protective strategies evident in current trading patterns.

As the expiry date approaches, monitoring open interest and price action around key strike prices will be crucial for anticipating the stock’s near-term direction. Axis Bank remains a key bellwether for the private banking sector, with its options activity providing a window into evolving market sentiment.

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