HDFC Bank Sees Heavy Call Option Activity Amid Bearish Price Momentum

Call Option Activity Highlights

Data from the derivatives market reveals that HDFC Bank’s most actively traded call options are concentrated at strike prices of ₹910 and ₹920, both expiring on 30 March 2026. The ₹910 strike call saw 7,364 contracts traded, generating a turnover of approximately ₹783.31 lakhs, with an open interest of 4,143 contracts. Meanwhile, the ₹920 strike call recorded 7,090 contracts traded, with a turnover of ₹545.93 lakhs and a higher open interest of 7,675 contracts. The underlying stock price at the time stood at ₹900, indicating that traders are positioning for a potential upside in the near term.

The elevated open interest at the ₹920 strike suggests a strong interest in this level as a potential target or resistance point. The volume and turnover figures underscore robust liquidity in these call options, signalling active participation from institutional and retail investors alike. This heightened call option activity often reflects bullish sentiment, as traders anticipate the stock price to rise above these strike prices by expiry.

Price Performance and Technical Context

Despite the bullish options positioning, HDFC Bank’s stock price has been under pressure. It has declined by 0.84% on the most recent trading day, underperforming the private sector bank sector, which fell by 0.36%, and the Sensex, which dipped 0.18%. Over the past three consecutive trading sessions, the stock has lost 2.56% in value, signalling a short-term downtrend.

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating sustained bearish momentum. This technical weakness may be contributing to the cautious stance among investors, despite the active call option interest.

Investor participation has, however, shown signs of rising. Delivery volume on 25 February surged to 2.09 crore shares, a 60.37% increase compared to the five-day average delivery volume. This suggests that while the stock price has been falling, more investors are engaging in actual share transactions, possibly positioning for a rebound or accumulating at lower levels.

Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting trade sizes up to ₹48.77 crores based on 2% of the five-day average. This ensures that market participants can enter or exit positions without significant price impact.

Fundamental and Market Sentiment Analysis

HDFC Bank currently holds a Mojo Score of 48.0, categorised as a Sell grade as of 9 February 2026, downgraded from a previous Hold rating. The downgrade reflects concerns over valuation, earnings momentum, and sector headwinds. The bank’s market cap grade is 1, indicating it is a large-cap stock but with limited upside potential based on current fundamentals.

Despite its dominant position in the private banking sector, the recent downgrade and technical weakness suggest that investors are reassessing the risk-reward profile. The bearish price action contrasts with the active call option interest, which may be driven by speculative traders or hedgers anticipating a recovery or volatility ahead of the expiry.

Sector-wise, the private sector banking industry has faced challenges from rising interest rates, asset quality concerns, and competitive pressures. HDFC Bank’s underperformance relative to its peers and the broader Sensex index highlights these sectoral headwinds.

Expiry Patterns and Investor Positioning

The expiry date of 30 March 2026 is attracting significant open interest and turnover in call options, indicating that market participants are positioning for potential price movements in the coming month. The concentration of activity at the ₹910 and ₹920 strikes, both out-of-the-money relative to the current ₹900 stock price, suggests a cautiously optimistic outlook among option buyers.

Open interest at these strikes is substantial, with 7,675 contracts at ₹920 and 4,143 contracts at ₹910, signalling that traders expect the stock to breach these levels to profit from their call positions. However, the stock’s current technical weakness and recent price declines imply that this optimism is tempered by near-term risks.

Options traders may also be employing strategies such as spreads or hedges, balancing bullish bets with protective positions. The disparity between the active call option interest and the stock’s underperformance highlights the complex dynamics at play in the derivatives market.

Investor Takeaways and Outlook

For investors, the current scenario presents a mixed picture. The heavy call option activity at strikes above the current price indicates some degree of bullish speculation or hedging, but the stock’s technical and fundamental indicators suggest caution. The downgrade to a Sell rating by MarketsMOJO and the stock’s underperformance relative to its sector and the Sensex highlight the risks involved.

Investors should closely monitor price action around the ₹910-₹920 levels, as a sustained move above these strikes could validate the bullish options positioning and signal a potential recovery. Conversely, failure to breach these levels may reinforce the bearish trend and prompt further downside.

Given the rising delivery volumes, there is evidence of increased investor interest, which could provide some support. However, the broader macroeconomic environment and sector-specific challenges remain key factors influencing HDFC Bank’s near-term trajectory.

In summary, while call option activity suggests optimism among some market participants, the overall outlook for HDFC Bank remains cautious. Investors should weigh the technical signals, fundamental ratings, and market context before making allocation decisions.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →