Axis Bank Sees Sharp Rise in Derivatives Open Interest Amid Bullish Momentum

Open Interest and Volume Dynamics

On 19 February 2026, Axis Bank’s open interest rose sharply from 1,68,500 contracts to 1,94,479, marking an increase of 25,979 contracts or 15.42%. This surge in OI was accompanied by a robust futures volume of 1,18,625 contracts, underscoring active trading in the stock’s derivatives. The combined futures and options value stood at approximately ₹45,275.59 crores, with futures contributing ₹449.77 crores and options an overwhelming ₹56,651.57 crores, highlighting the stock’s liquidity and prominence in the derivatives market.

The underlying stock closed at ₹1,374, just 3.34% shy of its 52-week high of ₹1,418.3, reinforcing the bullish sentiment. Axis Bank outperformed its sector by 0.69% on the day, delivering a 1.19% gain compared to the sector’s 0.34% and the Sensex’s 0.61% returns. The stock is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling sustained upward momentum.

Market Positioning and Investor Behaviour

The sharp rise in open interest coupled with strong volume suggests fresh positioning by market participants, likely anticipating further upside. However, delivery volumes tell a nuanced story. The delivery volume on 19 February was 15.29 lakh shares, down 55.6% from the five-day average, indicating that while derivatives activity is heating up, actual investor participation in the cash segment has moderated. This divergence often points to speculative or hedging activity in the derivatives market rather than outright accumulation in the underlying shares.

Liquidity remains ample, with the stock’s traded value supporting trade sizes up to ₹12.83 crores based on 2% of the five-day average traded value. This liquidity ensures that large institutional trades can be executed without significant price impact, further encouraging active derivatives participation.

Directional Bets and Derivatives Sentiment

The increase in open interest is often interpreted as a sign of new money entering the market, with traders taking fresh positions. In Axis Bank’s case, the 15.4% rise in OI alongside a price gain suggests that the majority of these positions are bullish. The stock’s futures value of ₹449.77 crores and the massive options value exceeding ₹56,651 crores indicate that options traders are actively positioning, possibly through call buying or put selling strategies, to capitalise on expected upward price movement.

Given the stock’s proximity to its 52-week high and its outperformance relative to the private sector banking sector, market participants appear confident in Axis Bank’s near-term prospects. The Mojo Score of 67.0, upgraded from a previous Sell rating to a Hold on 15 October 2025, reflects improved fundamentals and technical strength, although the grade suggests cautious optimism rather than a full bullish endorsement.

Comparative Sector and Market Context

Axis Bank’s performance is notable against the backdrop of the private sector banking industry, which has seen mixed results amid macroeconomic uncertainties. The stock’s ability to outperform its sector by 0.69% on the day and trade above all major moving averages indicates resilience and relative strength. Its large market capitalisation of ₹4,22,974 crores places it firmly among the sector leaders, attracting institutional interest and ensuring robust liquidity.

However, the falling delivery volumes caution that the rally may be driven more by short-term traders and derivatives players than by long-term investors. This dynamic warrants close monitoring, as sustained price appreciation typically requires stronger participation in the cash market.

Implications for Investors and Traders

For investors, the recent surge in derivatives open interest and the stock’s technical strength suggest a cautiously optimistic outlook. The Hold rating and Mojo Score of 67.0 imply that while the stock is not a strong buy, it remains a viable option for those seeking exposure to the private banking sector with a moderate risk appetite.

Traders, particularly those active in the derivatives market, may view the rising OI and volume as an opportunity to capitalise on momentum. The substantial options activity hints at complex strategies being employed, including spreads and hedges, which could amplify price moves in either direction depending on broader market cues.

Given the falling delivery volumes, it is prudent to watch for confirmation of sustained buying interest in the cash segment before committing significant capital. The stock’s liquidity and large market cap provide a favourable environment for both institutional and retail participation, but volatility may increase as the stock approaches its 52-week high.

Outlook and Conclusion

Axis Bank’s recent derivatives activity highlights a market increasingly focused on its near-term prospects. The 15.4% jump in open interest, combined with strong volume and price gains, signals bullish positioning among traders. However, the Hold Mojo Grade and declining delivery volumes counsel measured optimism.

Investors should monitor upcoming quarterly results, sector developments, and macroeconomic indicators that could influence banking stocks. The current technical setup favours a continuation of the uptrend, but profit-taking and volatility remain risks near the stock’s 52-week high.

Overall, Axis Bank remains a key stock to watch within the private sector banking space, with derivatives market data providing valuable insights into evolving market sentiment and positioning.

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