Axis Bank Sees Surge in Call Option Activity Ahead of January Expiry

Robust Call Option Activity Highlights Investor Optimism

Data from the derivatives market reveals that Axis Bank’s call options with a strike price of ₹1300 expiring on 27 January 2026 witnessed a remarkable 11,848 contracts traded on 5 January 2026. This translated into a turnover of ₹1268.48 lakhs, underscoring significant investor interest in bullish bets on the private sector banking giant. The open interest at this strike price stands at 11,990 contracts, indicating sustained positions and confidence in the stock’s upward trajectory.

The underlying stock closed at ₹1286.40, just 1.37% shy of its 52-week high of ₹1304, reinforcing the rationale behind the heavy call option activity. Investors appear to be positioning for a breakout above this key resistance level, anticipating positive catalysts or continued momentum in the banking sector.

Price and Volume Trends Support Positive Outlook

Axis Bank’s stock performance on the day further bolstered bullish sentiment. The share price rose by 1.59%, significantly outperforming the private sector banking sector’s decline of 0.10% and the broader Sensex’s marginal gain of 0.04%. This relative strength is supported by the stock trading above all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a strong uptrend across multiple timeframes.

Investor participation has also surged, with delivery volumes reaching 43.36 lakh shares on 2 January 2026, a sharp increase of 121.03% compared to the five-day average delivery volume. This heightened activity suggests that market participants are not only trading the stock but also accumulating shares for the longer term, reinforcing the bullish narrative.

Fundamental and Market Context

Axis Bank Ltd. is a large-cap private sector bank with a market capitalisation of approximately ₹3,98,258 crores. The company’s recent upgrade in mojo grade from Sell to Hold on 15 October 2025, accompanied by a mojo score of 58.0, reflects improving fundamentals and market perception. Despite the Hold rating, the stock’s recent price action and option market activity suggest that investors are increasingly optimistic about its near-term prospects.

Liquidity in Axis Bank shares remains robust, with the stock’s traded value comfortably supporting trade sizes up to ₹10.1 crores based on 2% of the five-day average traded value. This liquidity ensures that large institutional trades and option-related hedging activities can be executed efficiently without significant price impact.

Expiry Patterns and Strike Price Significance

The 27 January 2026 expiry is the nearest monthly expiry, and the concentration of call option activity at the ₹1300 strike price is noteworthy. This strike is slightly out-of-the-money relative to the current underlying price, indicating that traders are betting on a moderate upside move within the next three weeks. The open interest build-up at this strike suggests that many investors are either buying calls outright or writing calls as part of spread strategies to capitalise on expected volatility or directional moves.

Such positioning often precedes significant price action, as option writers hedge their positions and buyers seek to benefit from potential rallies. The combination of rising open interest and high turnover at this strike price is a classic indicator of bullish sentiment in the derivatives market.

Sector and Broader Market Comparison

Axis Bank’s outperformance relative to its sector peers and the Sensex is particularly relevant given the current cautious environment in the banking sector. While the private sector banking index has seen marginal declines, Axis Bank’s resilience and positive momentum highlight its relative strength. This may be attributed to the bank’s improving asset quality, steady loan growth, and strategic initiatives to enhance digital banking capabilities.

Investors should note, however, that the mojo grade remains at Hold, signalling that while the stock shows promise, it may not yet have fully realised its potential or could face near-term headwinds. The upgrade from Sell to Hold in October 2025 indicates a turnaround in sentiment but also suggests that further confirmation is needed before a more bullish rating is warranted.

Implications for Investors and Traders

The surge in call option volumes and open interest at the ₹1300 strike price ahead of the January expiry suggests that traders are positioning for a potential breakout or sustained rally in Axis Bank shares. For investors, this could signal an opportunity to monitor the stock closely for confirmation of upward momentum, especially given its proximity to the 52-week high and strong technical indicators.

However, the Hold mojo grade and the recent upgrade from Sell imply that caution remains warranted. Investors should weigh the bullish derivatives activity against fundamental factors and broader market conditions before increasing exposure. Traders may consider strategies that capitalise on volatility, such as spreads or covered calls, to manage risk while participating in potential upside moves.

Overall, the combination of strong call option activity, rising delivery volumes, and technical strength paints a cautiously optimistic picture for Axis Bank in the near term.

Looking Ahead

As the 27 January expiry approaches, market participants will be closely watching Axis Bank’s price action and option market dynamics. A decisive move above the ₹1300 level could trigger further bullish momentum and validate the current positioning. Conversely, failure to breach this resistance may lead to profit-taking and a reassessment of the stock’s near-term outlook.

Investors should also keep an eye on sectoral developments, macroeconomic indicators, and corporate earnings updates that could influence sentiment towards private sector banks. Given Axis Bank’s large-cap status and liquidity, it will likely remain a key focus for both institutional and retail investors in the coming weeks.

Summary

In summary, Axis Bank Ltd. is currently the most active stock in the call options market, with significant volumes and open interest concentrated at the ₹1300 strike price expiring on 27 January 2026. The underlying stock’s strong technical position, rising investor participation, and outperformance relative to its sector underpin the bullish sentiment. While the mojo grade remains at Hold, the recent upgrade and market activity suggest improving fundamentals and growing confidence among investors. Traders and investors should monitor developments closely as the expiry date approaches to capitalise on potential opportunities while managing associated risks.

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