Bandhan Bank Sees Significant Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 19 Feb 2026, Bandhan Bank's open interest (OI) in derivatives rose sharply to 44,808 contracts from 38,558 the previous day, marking an increase of 6,250 contracts or 16.21%. This surge is significant given the stock's underlying value of ₹171 and the futures value standing at ₹87,471 lakhs. The options segment also commands substantial interest, with an option value exceeding ₹7,387 crores, contributing to a total derivatives value of approximately ₹88,610 lakhs.

The volume traded in futures contracts was recorded at 25,781, indicating active participation from market participants. This volume, combined with the rising open interest, points to fresh positions being established rather than existing ones being squared off, a classic sign of conviction in the current market trend or anticipation of a directional move.

Price Performance and Moving Averages

Bandhan Bank's stock price showed a marginal decline of 0.78% on the day, underperforming its own day change of -0.44% but still outperforming the private sector banking sector's 1.12% fall and the broader Sensex's 1.12% drop. The stock has recently reversed after three consecutive days of gains, suggesting some profit booking or short-term caution among investors.

Notably, the share price remains above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained uptrend in the medium to long term. This technical backdrop supports the view that the recent dip could be a temporary correction rather than a trend reversal.

Investor Participation and Liquidity Considerations

Despite the open interest surge, investor participation appears to be waning in terms of delivery volumes. On 18 Feb, delivery volume fell sharply by 56.06% to 31.81 lakh shares compared to the five-day average, indicating reduced commitment from long-term holders. This divergence between derivatives activity and delivery volumes may imply that short-term traders and speculators are driving the current momentum rather than institutional investors.

Liquidity remains adequate for sizeable trades, with the stock supporting a trade size of approximately ₹3.12 crore based on 2% of the five-day average traded value. This level of liquidity is crucial for derivatives traders looking to enter or exit positions without significant price impact.

Market Positioning and Directional Bets

The sharp increase in open interest alongside rising volumes suggests that traders are positioning for a potential directional move in Bandhan Bank's stock. Given the recent price pullback after a short rally, market participants may be hedging or speculating on volatility ahead of upcoming corporate or macroeconomic events.

Options data, with a substantial value of over ₹7,387 crores, indicates active call and put writing, which could be interpreted as a strategy to capitalise on expected price swings or to protect existing positions. The balance between call and put open interest, however, is not explicitly detailed, leaving some ambiguity about the predominant directional bias.

From a technical standpoint, the stock's position above all major moving averages supports a bullish medium-term outlook, but the recent dip and falling delivery volumes caution against overly optimistic assumptions. Traders may be adopting a wait-and-watch approach, using derivatives to hedge or speculate on short-term volatility while maintaining a longer-term bullish stance.

Fundamental and Market Context

Bandhan Bank, classified as a small-cap private sector bank with a market capitalisation of approximately ₹27,451 crore, holds a Mojo Score of 51.0 and a Mojo Grade of Hold as of 4 Feb 2026, upgraded from a Sell rating. This reflects a cautious but improving fundamental outlook, supported by steady operational performance and sectoral tailwinds.

The bank's recent outperformance relative to its sector and the Sensex, despite a minor price setback, underscores its resilience amid broader market volatility. However, the Hold rating suggests that investors should remain selective and monitor developments closely before committing fresh capital.

Implications for Investors and Traders

The recent surge in open interest and volume in Bandhan Bank's derivatives market offers both opportunities and risks for investors. The increased activity suggests that market participants are anticipating significant price movement, which could be leveraged through strategic options and futures trades.

However, the divergence between derivatives activity and falling delivery volumes indicates that the rally may be driven more by short-term traders than by long-term investors. This dynamic warrants caution, as sudden shifts in sentiment or external shocks could trigger volatility.

Investors should consider the bank's current Hold rating and moderate Mojo Score when evaluating their exposure. Monitoring open interest trends, volume patterns, and price action in conjunction with fundamental updates will be critical to making informed decisions.

Given the stock's liquidity profile, traders can execute sizeable positions without excessive slippage, but should remain vigilant to market developments and adjust strategies accordingly.

Conclusion

Bandhan Bank's derivatives market activity has intensified with a 16.2% jump in open interest, signalling renewed interest and positioning among traders. While the stock remains technically strong above key moving averages, the recent price dip and declining delivery volumes suggest a nuanced outlook. Investors and traders should balance the bullish technical signals with cautionary signs from participation metrics and fundamental ratings.

As the bank navigates a complex market environment, the evolving derivatives landscape will be a key barometer of sentiment and potential price direction in the near term.

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