Axis Bank Sees Sharp Open Interest Surge Signalling Renewed Market Interest

Open Interest and Volume Dynamics

On 19 February 2026, Axis Bank’s open interest in derivatives rose sharply to 186,922 contracts from the previous 168,500, marking an increase of 18,422 contracts or 10.93%. This surge in OI was accompanied by a daily volume of 71,199 contracts, reflecting heightened trading activity. The futures segment alone accounted for a substantial value of ₹2,87,231.70 lakhs, while options contributed an overwhelming ₹32,132.16 crores, culminating in a total derivatives value of approximately ₹2,88,860.96 lakhs.

The underlying stock price closed at ₹1,367, just 3.74% shy of its 52-week high of ₹1,418.30, underscoring the bullish undertone. Axis Bank outperformed its sector by 0.29% and delivered a 0.87% gain on the day, surpassing the Sensex’s 0.55% and the private sector banking sector’s 0.49% returns.

Market Positioning and Moving Averages

Technical indicators reinforce the positive momentum. Axis Bank is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling sustained upward momentum across multiple timeframes. This technical strength is likely encouraging traders to increase their exposure through derivatives, as reflected in the rising open interest.

However, despite the bullish price action and derivatives activity, investor participation in the cash segment has shown signs of moderation. Delivery volume on 19 February stood at 15.29 lakh shares, down 55.6% compared to the five-day average delivery volume. This divergence suggests that while speculative interest in derivatives is rising, long-term investor conviction in the cash market may be temporarily subdued.

Implications of the Open Interest Surge

The increase in open interest alongside rising prices typically indicates fresh buying interest and the addition of new long positions. In Axis Bank’s case, the 10.93% jump in OI suggests that market participants are positioning for further upside, possibly anticipating continued strength in the banking sector amid improving macroeconomic conditions and robust earnings prospects.

Moreover, the substantial notional value in options contracts points to active hedging and speculative strategies. The large options value, exceeding ₹32,000 crores, indicates that traders are employing complex strategies such as spreads and straddles to capitalise on expected volatility or directional moves.

Mojo Score and Rating Upgrade

Axis Bank currently holds a Mojo Score of 67.0, reflecting a moderate outlook with a Hold rating. This marks an upgrade from its previous Sell rating as of 15 October 2025, signalling improved fundamentals and market sentiment. The bank’s large-cap status with a market capitalisation of ₹4,22,974 crore further underpins its stability and liquidity, making it a preferred choice for institutional and retail investors alike.

Despite the upgrade, the Mojo Grade remains cautious, suggesting that while the bank shows promise, investors should monitor evolving market conditions and sectoral trends closely before committing significant capital.

Sector and Market Context

The private sector banking industry has been witnessing steady growth, supported by improving credit demand, digital adoption, and regulatory reforms. Axis Bank’s outperformance relative to its sector peers and the broader Sensex indicates its ability to capture market share and deliver consistent earnings growth.

However, the falling delivery volumes in the cash segment hint at a potential rotation or profit-booking phase among long-term investors, which could introduce short-term volatility. The derivatives market, with its increased open interest and volume, appears to be the arena where fresh directional bets are being placed, possibly by more nimble traders and institutional participants.

Potential Directional Bets and Strategy

Given the data, the surge in open interest combined with price strength suggests a bullish bias among derivatives traders. The increase in futures and options activity points to expectations of further upside, possibly driven by positive earnings forecasts, macroeconomic tailwinds, or sectoral momentum.

Traders might be employing call options and long futures positions to capitalise on anticipated gains, while also using options strategies to hedge against volatility. The large notional value in options contracts indicates a sophisticated approach to risk management and profit maximisation.

Investors should remain vigilant for any shifts in volume patterns or open interest that could signal a change in trend. A sustained rise in OI with rising prices typically confirms bullish sentiment, whereas a divergence could warn of an impending correction.

Conclusion: A Watchful Optimism

Axis Bank’s recent surge in open interest and volume in the derivatives market highlights a growing bullish sentiment among traders, supported by strong technicals and an upgraded fundamental outlook. While the stock trades near its 52-week high and outperforms its sector, the decline in delivery volumes suggests some caution among long-term investors.

For market participants, this environment presents opportunities to capitalise on momentum through derivatives, but also calls for careful monitoring of market signals to manage risk effectively. The bank’s Hold rating and moderate Mojo Score reflect this balanced view, recommending a watchful optimism rather than aggressive accumulation at current levels.

As always, investors should consider their risk appetite and investment horizon before making decisions, keeping an eye on broader economic indicators and sectoral developments that could influence Axis Bank’s trajectory in the coming months.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today