Canara Bank Sees Surge in Call Option Activity as Shares Hit 52-Week High

Robust Call Option Activity Highlights Bullish Positioning

On 26 Feb 2026, Canara Bank’s call options with a strike price of ₹160 and expiry on 30 Mar 2026 witnessed the highest trading volume in the segment. A total of 2,213 contracts changed hands, generating a turnover of approximately ₹976.93 lakhs. The open interest stood at 1,597 contracts, indicating sustained interest and potential accumulation by market participants ahead of the expiry date.

The underlying stock price at the time was ₹160.21, just above the strike price, suggesting that traders are positioning for further upside in the coming weeks. This elevated call option activity is often interpreted as a bullish signal, as investors seek leveraged exposure to anticipated price gains.

Price Performance and Technical Strength

Canara Bank’s stock has demonstrated impressive momentum, outperforming its sector peers and the broader market. The stock recorded a 1-day return of 0.72%, surpassing the Public Sector Bank sector’s 0.32% and the Sensex’s 0.24% gains on the same day. Over the past five trading sessions, the share price has risen by 7.31%, marking a consistent upward trajectory.

Technically, the stock is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a strong bullish trend. This alignment of moving averages often attracts momentum traders and institutional investors, further supporting price appreciation.

Rising Investor Participation and Liquidity

Investor interest in Canara Bank shares has surged notably, with delivery volumes on 25 Feb reaching 2.7 crore shares. This represents a remarkable 100.43% increase compared to the five-day average delivery volume, signalling heightened conviction among long-term investors. The stock’s liquidity remains robust, with an average traded value sufficient to support trade sizes up to ₹9.59 crore without significant market impact.

Fundamental and Market Context

Canara Bank, a leading public sector bank with a market capitalisation of ₹1,45,202.99 crore, has recently been upgraded by MarketsMOJO from a Hold to a Buy rating, reflecting improved fundamentals and positive outlook. The Mojo Score stands at a healthy 78.0, indicating strong quality and growth prospects relative to peers.

The bank’s market cap grade is 1, denoting its status as a large-cap stock with significant institutional interest and stable market presence. This upgrade on 3 Feb 2026 aligns with the recent price strength and rising investor confidence, which is also mirrored in the options market activity.

Expiry Patterns and Strike Price Analysis

The call options expiring on 30 Mar 2026 have attracted the most attention, with the ₹160 strike price being the focal point. This strike is slightly below the current market price, suggesting that traders expect the stock to maintain or exceed this level by expiry. The open interest of 1,597 contracts at this strike price is substantial, indicating that many investors are either hedging existing positions or speculating on further gains.

Such concentrated activity near the money strike price often precedes significant price movements, as option writers and buyers adjust their positions in response to evolving market conditions. The high turnover of ₹976.93 lakhs in call options also points to active trading and liquidity in the derivatives segment for Canara Bank.

Comparative Sector and Market Performance

Within the Public Sector Bank sector, Canara Bank’s outperformance is notable. While the sector gained 0.32% on the day, Canara Bank’s shares rose by 0.72%, nearly double the sector average. This relative strength is a positive indicator for investors seeking exposure to the banking space with a preference for stocks demonstrating leadership and momentum.

Moreover, the Sensex’s modest 0.24% gain on the same day highlights Canara Bank’s ability to outperform the broader market, reinforcing its appeal as a large-cap stock with strong fundamentals and technical backing.

Outlook and Investor Takeaways

Given the strong call option activity, rising open interest, and positive price momentum, Canara Bank appears well-positioned for further gains in the near term. The upgrade to a Buy rating by MarketsMOJO and the stock’s technical strength across multiple moving averages provide additional confidence for investors.

However, investors should remain mindful of broader macroeconomic factors and sector-specific risks that could influence banking stocks, including interest rate movements, asset quality concerns, and regulatory developments. The current liquidity and delivery volume trends suggest that institutional investors are backing the stock, which may help mitigate volatility.

Overall, the combination of fundamental upgrades, technical outperformance, and heightened call option interest paints a bullish picture for Canara Bank as it approaches the March expiry cycle.

Summary

Canara Bank’s recent surge in call option trading activity, coupled with its new 52-week high and consistent price gains, highlights strong market optimism. The stock’s upgrade to a Buy rating and robust investor participation further reinforce its appeal. Traders and investors looking for exposure to the public sector banking space may find Canara Bank’s current setup attractive, supported by both fundamental and technical factors.

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