Call Option Activity Highlights
Data from the derivatives market reveals that HDFC Bank’s call options have been among the most actively traded contracts in recent sessions. The strike prices of 930, 940, and 950 have attracted the highest volumes, with 12,182 contracts traded at the 930 strike, 7,019 at 940, and 5,367 at 950, all expiring on 27 January 2026. The turnover for these strikes is substantial, amounting to ₹668.67 lakhs, ₹206.15 lakhs, and ₹80.88 lakhs respectively, underscoring strong investor interest.
Open interest figures further corroborate this trend, with 11,600 contracts outstanding at the 930 strike, 11,158 at 940, and 17,551 at 950. The underlying stock price currently stands at ₹928.55, placing these strikes just above or near the money, which typically attracts speculative and hedging activity.
Market Context and Stock Performance
Despite the robust options activity, HDFC Bank’s stock price has shown a modest decline, down 0.55% on the day, closing at ₹928.55. This underperformance is in line with the broader private sector banking sector, which fell 0.46%, and slightly worse than the Sensex’s marginal dip of 0.08%. The stock has traded within a narrow range of ₹7.15, indicating limited intraday volatility.
Technical indicators suggest a cautious outlook, with the stock trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This persistent weakness across multiple timeframes points to a lack of upward momentum in the near term. However, rising investor participation is evident, as delivery volumes on 20 January surged to 2.95 crore shares, a 21.4% increase over the five-day average, signalling renewed interest from long-term holders or institutional investors.
Mojo Score and Rating Revision
MarketsMOJO’s latest assessment downgraded HDFC Bank’s mojo grade from Buy to Hold on 12 January 2026, reflecting a more cautious stance amid evolving market conditions. The mojo score currently stands at 60.0, indicating moderate confidence in the stock’s near-term prospects. The market cap grade remains at 1, consistent with its large-cap status and ₹14,30,381.07 crore market capitalisation.
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Investor Sentiment and Expiry Dynamics
The concentration of call option activity at strikes slightly above the current price suggests a cautiously optimistic sentiment among traders. The 930 strike, with the highest traded contracts and turnover, indicates a strong bet on the stock inching higher before expiry. Meanwhile, the 940 and 950 strikes also show significant open interest, hinting at layered bullish positioning.
Expiry on 27 January 2026 is likely to be a focal point for price action, as traders adjust their positions in response to market developments and quarterly results. The elevated open interest at these strikes could lead to increased volatility as expiry approaches, with potential for price pinning or sharp moves depending on broader market cues.
Liquidity and Trading Viability
HDFC Bank’s stock remains highly liquid, with an average traded value sufficient to support sizeable trade sizes of approximately ₹70.99 crore based on 2% of the five-day average traded value. This liquidity facilitates active participation from institutional and retail investors alike, enabling efficient price discovery and options market activity.
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Outlook and Strategic Considerations
While the recent downgrade to a Hold rating and the stock’s technical weakness suggest caution, the active call option interest near the money indicates that market participants are positioning for a potential rebound or at least a stabilisation in the near term. Investors should monitor upcoming earnings announcements, sector developments, and macroeconomic factors that could influence banking stocks.
Given the mixed signals, a balanced approach is advisable. Traders with a bullish bias may consider call options at the 930 to 950 strikes to capitalise on possible upside, while risk-averse investors might await clearer confirmation of trend reversal before increasing exposure.
Overall, HDFC Bank remains a key bellwether in the private sector banking space, and its derivatives activity provides valuable insight into market expectations and sentiment ahead of the January expiry.
Summary
HDFC Bank Ltd.’s derivatives market activity reveals a strong preference for call options at strikes just above the current price, reflecting cautious optimism despite a recent downgrade and technical headwinds. The stock’s liquidity and rising delivery volumes underscore sustained investor interest, while expiry dynamics could drive volatility in the coming days. Market participants should weigh these factors carefully when considering positions in this large-cap banking stock.
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