Axis Bank Sees Surge in Put Option Activity Amid Bearish Sentiment

Robust Put Option Volumes Highlight Investor Caution

On 27 January 2026, Axis Bank's put options saw remarkable trading volumes, particularly at strike prices close to the current underlying value of ₹1,311.4. The 1300 strike put option led the activity with 9,456 contracts traded, generating a turnover of ₹124.11 lakhs and an open interest of 3,747 contracts. This was closely followed by the 1290 strike put with 3,914 contracts traded and an open interest of 2,400, and the 1280 strike put with 4,046 contracts traded and 2,123 open interest.

These figures indicate a significant build-up of bearish bets or protective hedges against potential downside risks in the near term. The expiry date for these options is 27 January 2026, suggesting that traders are positioning themselves for volatility or a possible correction within the coming week.

Adding to this, the 24 February 2026 expiry also saw substantial put option activity at the 1300 strike price, with 2,667 contracts traded and a turnover of ₹487.73 lakhs, albeit with a lower open interest of 832 contracts. This longer-dated expiry interest points to a sustained cautious outlook extending beyond the immediate expiry cycle.

Stock Performance and Technical Context

Despite the heavy put option activity, Axis Bank's stock price has demonstrated resilience. It closed just 1.66% shy of its 52-week high of ₹1,327, outperforming its sector by 3.82% on the day with a 4.13% gain compared to the sector's 0.09% and Sensex's 0.37% returns. The stock opened with a gap-up of 2.45% and touched an intraday high of ₹1,308.7, reflecting strong buying interest.

Technically, Axis Bank is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a robust uptrend. Rising investor participation is evident from the delivery volume of 64.34 lakh shares on 23 January, which surged 55.1% above the five-day average, indicating increased conviction among shareholders.

Mojo Score and Market Positioning

Axis Bank currently holds a Mojo Score of 60.0, categorised as a 'Hold' rating, an upgrade from its previous 'Sell' grade as of 15 October 2025. This reflects a moderate outlook on the stock's near-term prospects, balancing its strong market capitalisation of ₹3,91,300 crore and large-cap status against the cautious sentiment reflected in options trading.

The bank's market cap grade is 1, indicating its significant weight in the market and liquidity, which supports active options trading and institutional participation. The stock's liquidity is robust enough to handle trade sizes of approximately ₹18.15 crore based on 2% of the five-day average traded value, making it a preferred choice for large traders and hedgers.

Expiry Patterns and Investor Strategies

The concentration of put option volumes at strike prices near ₹1,280 to ₹1,300 with expiry dates clustered around late January and late February 2026 suggests that investors are hedging against a potential pullback or volatility in the short to medium term. The high open interest at these strikes indicates that these positions are not merely speculative but likely part of strategic risk management.

Given the stock's proximity to its 52-week high and strong technical indicators, the put buying could also be interpreted as protective hedging by long investors seeking to safeguard gains. Alternatively, it may signal a cautious stance by traders anticipating profit-taking or sector-specific headwinds in the private banking space.

Sector and Market Context

Axis Bank's outperformance relative to its sector and the broader Sensex on the day underlines its resilience amid mixed market signals. The private sector banking industry continues to face challenges such as credit growth moderation and regulatory scrutiny, which may be contributing to the cautious positioning seen in options markets.

However, the bank's strong fundamentals, rising investor participation, and technical strength provide a counterbalance to bearish sentiment, suggesting that the market is pricing in a nuanced outlook rather than outright pessimism.

Implications for Investors

For investors, the surge in put option activity around Axis Bank signals a need for vigilance. While the stock's technical and fundamental indicators remain positive, the options market reveals underlying concerns about potential near-term volatility or downside risk. This duality suggests that investors should consider protective strategies, such as stop-loss orders or hedging through options, to manage risk effectively.

Moreover, the upgrade in Mojo Grade from 'Sell' to 'Hold' indicates improving sentiment, but not yet a full endorsement for aggressive buying. Investors may benefit from monitoring upcoming earnings, sector developments, and macroeconomic factors that could influence the bank's trajectory.

Conclusion

Axis Bank's recent options market activity underscores a complex investor landscape where bullish momentum coexists with prudent hedging. The heavy put option volumes at strikes near the current price, combined with strong stock performance and upgraded ratings, reflect a market balancing optimism with caution. As expiry dates approach, the evolving dynamics in options and stock price will be critical for investors seeking to navigate this large-cap banking stock.

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