HDFC Bank Sees Heavy Call Option Activity Ahead of February Expiry

Robust Call Option Volumes Highlight Market Interest

On 13 February 2026, HDFC Bank's call options expiring on 24 February attracted heavy trading volumes, particularly at the ₹920 and ₹930 strike prices. The ₹930 strike call option led with 14,576 contracts traded, generating a turnover of approximately ₹839.36 lakhs and an open interest of 9,969 contracts. Meanwhile, the ₹920 strike call saw 13,649 contracts exchanged, with turnover reaching ₹1,138.8 lakhs and open interest standing at 4,330 contracts. These figures underscore a pronounced investor focus on near-the-money call options, reflecting expectations of potential upward price movement or hedging strategies.

Underlying Price and Market Context

The underlying stock price of HDFC Bank closed at ₹920.9 on the day of analysis, hovering just above the ₹920 strike price. This proximity to the strike prices with elevated call option activity suggests that traders are positioning for a possible breakout or at least a stabilisation above the current levels. However, the stock’s one-day return was a marginal decline of 0.08%, slightly outperforming the private sector bank sector’s fall of 0.54% and the broader Sensex’s 0.87% drop.

Technical Indicators and Investor Behaviour

Despite the active call option interest, HDFC Bank’s technical indicators remain subdued. The stock is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a persistent downtrend. Notably, delivery volume on 12 February surged to 2.14 crore shares, marking a 17.88% increase over the five-day average, indicating rising investor participation. Liquidity remains robust, with the stock capable of supporting trade sizes up to ₹51.89 crore based on 2% of the five-day average traded value.

Mojo Grade Downgrade Reflects Caution

On 9 February 2026, HDFC Bank’s Mojo Grade was downgraded from Hold to Sell, with a current Mojo Score of 48.0. This downgrade reflects concerns over the bank’s near-term outlook, despite its commanding market capitalisation of ₹14,15,627 crore, categorising it as a large-cap stock. The Market Cap Grade stands at 1, indicating the highest market capitalisation tier. The downgrade suggests that while the bank remains a heavyweight in the private sector banking space, investors should exercise caution given potential headwinds.

Interpreting the Call Option Activity Amid Mixed Signals

The heavy call option volumes at strike prices of ₹920 and ₹930, both close to the current underlying price, indicate a degree of bullish positioning among traders. Open interest at the ₹930 strike is particularly notable, nearing 10,000 contracts, which may imply expectations of the stock moving higher before expiry. However, the stock’s technical weakness and the recent Mojo Grade downgrade temper this optimism, suggesting that some investors may be using call options for hedging or speculative strategies rather than outright bullish bets.

Expiry Patterns and Market Sentiment

The 24 February expiry date is less than two weeks away, intensifying the focus on short-term price movements. The concentration of call option activity near the current price level often signals a market awaiting a catalyst or significant event. Given the bank’s recent performance and sector dynamics, traders appear to be positioning for a potential rebound or at least a price consolidation above ₹920. However, the lack of upward momentum in moving averages and the Sell Mojo Grade suggest that any rally may face resistance.

Sector and Market Comparison

HDFC Bank’s performance on the day slightly outpaced the private sector banking sector, which declined by 0.54%, and the broader Sensex, which fell 0.87%. This relative outperformance, albeit marginal, may be contributing to the elevated call option interest as investors speculate on a potential sector rebound. However, the bank’s sustained trading below all major moving averages indicates that the broader downtrend remains intact, and any recovery may be short-lived without fundamental improvements.

Investor Takeaways and Outlook

For investors, the current scenario presents a nuanced picture. The surge in call option volumes at near-the-money strikes suggests that market participants are positioning for a possible upside move or hedging against downside risks. Yet, the downgrade to a Sell Mojo Grade and the technical weakness caution against aggressive bullish bets. Investors should closely monitor upcoming earnings, sector developments, and macroeconomic factors that could influence the bank’s trajectory ahead of the February expiry.

Conclusion

HDFC Bank Ltd.’s active call option market ahead of the 24 February expiry highlights a complex interplay of bullish speculation and cautious sentiment. While the heavy volumes at ₹920 and ₹930 strike prices indicate optimism, the bank’s technical indicators and recent rating downgrade counsel prudence. Market participants would be well advised to balance these factors carefully when considering exposure to HDFC Bank in the near term.

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