HDFC Bank Sees Heavy Call Option Activity Ahead of January Expiry

Call Option Activity Highlights

The call options for HDFC Bank Ltd. (underlying ticker: HDFCBANK) have witnessed exceptional trading volumes, particularly for contracts expiring on 27 January 2026. The 950 strike call option recorded the highest number of contracts traded at 7,789, generating a turnover of ₹874.35 lakhs and an open interest of 7,384 contracts. Close behind, the 960 strike call option saw 4,332 contracts traded with a turnover of ₹367.16 lakhs and an open interest of 7,133 contracts. These figures underscore a pronounced investor preference for strike prices slightly above the current underlying value of ₹950.65, signalling expectations of upward price movement in the near term.

Underlying Price and Market Context

HDFC Bank’s underlying share price currently stands at ₹950.65, trading marginally below key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Despite this technical positioning, the stock’s one-day return of 0.17% outperformed the sector’s 0.01% gain and the Sensex’s 0.17% decline, indicating relative resilience. The bank’s market capitalisation remains robust at ₹14,62,534.83 crores, firmly placing it in the large-cap category.

Investor Participation and Liquidity

Investor engagement has surged notably, with delivery volume on 7 January reaching 5.1 crore shares, a remarkable 294.42% increase compared to the five-day average delivery volume. This heightened participation suggests renewed interest from both retail and institutional investors. Liquidity metrics also support active trading, with the stock’s liquidity sufficient to accommodate trade sizes up to ₹55.58 crores based on 2% of the five-day average traded value.

Mojo Score and Rating Dynamics

HDFC Bank currently holds a Mojo Score of 72.0, reflecting a solid Buy rating, a slight moderation from its previous Strong Buy grade as of 7 January 2026. This adjustment indicates a cautious but positive outlook from MarketsMOJO analysts, who continue to favour the stock based on its fundamentals and technical parameters. The bank’s market cap grade is rated at 1, underscoring its status as a large-cap heavyweight within the private sector banking space.

Expiry Patterns and Strike Price Concentration

The concentration of call option activity at the 950 and 960 strike prices for the 27 January expiry suggests that traders are positioning for a modest rally above the current market price within the next three weeks. Open interest levels exceeding 7,000 contracts at these strikes indicate significant liquidity and interest, which could translate into increased volatility as expiry approaches. The elevated turnover values further confirm active participation by both hedgers and speculators.

Technical Outlook and Market Sentiment

Despite trading below all major moving averages, the stock’s relative outperformance against the sector and benchmark indices hints at underlying strength. The surge in delivery volumes and call option activity points to a growing bullish sentiment, possibly driven by expectations of strong quarterly results or positive macroeconomic developments benefiting the banking sector. However, the slight downgrade from Strong Buy to Buy suggests some caution, likely due to near-term technical resistance and broader market uncertainties.

Implications for Investors

For investors, the current call option activity in HDFC Bank offers valuable insights into market expectations. The strong open interest and turnover at strikes just above the current price suggest that traders anticipate a potential upside move in the coming weeks. This could be driven by favourable earnings, regulatory developments, or broader economic recovery trends supporting credit growth and asset quality in the banking sector.

However, the stock’s technical positioning below key moving averages advises caution. Investors should monitor price action closely, particularly around the 950-960 levels, which appear to be critical zones for near-term momentum. The recent downgrade in Mojo Grade from Strong Buy to Buy also signals a need for measured optimism, balancing bullish sentiment with prudent risk management.

Sector and Market Comparison

HDFC Bank’s performance today, with a 0.17% gain, outpaces the private sector banking sector’s marginal 0.01% rise and contrasts with the Sensex’s 0.17% decline. This relative strength highlights the bank’s resilience amid broader market fluctuations. Given its large-cap status and significant market capitalisation, HDFC Bank often serves as a bellwether for the private banking industry, making its option market activity a useful barometer for sector sentiment.

Conclusion

The pronounced call option activity in HDFC Bank Ltd. ahead of the 27 January 2026 expiry reflects a predominantly bullish stance among market participants. With substantial volumes and open interest concentrated at the 950 and 960 strike prices, investors are positioning for a potential price appreciation in the near term. While technical indicators suggest some resistance, the stock’s relative outperformance and rising investor participation underpin a cautiously optimistic outlook. Market watchers and investors should continue to track option market trends alongside fundamental developments to gauge the evolving sentiment around this private sector banking giant.

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