HDFC Bank Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the options market reveals that put options with strike prices of ₹910 and ₹930 have emerged as the most actively traded contracts for HDFC Bank, with expiry set for 27 January 2026. The ₹930 strike put option recorded the highest number of contracts traded at 4,500, generating a turnover of ₹203.69 lakhs and an open interest of 6,652 contracts. Meanwhile, the ₹910 strike put option saw 4,095 contracts traded, with a turnover of ₹57.21 lakhs and an open interest of 2,684 contracts.

These figures are particularly significant given the underlying stock price of ₹928.55, indicating that investors are hedging or speculating on a potential decline below these levels in the near term. The concentration of open interest at the ₹930 strike suggests a strong bearish positioning or protective hedging around this price point.

Stock Performance and Technical Context

HDFC Bank’s stock performance on 21 January 2026 was broadly in line with its sector, the private sector banking space, which itself was marginally down by 0.46% compared to the Sensex’s slight dip of 0.08%. The bank’s share price declined by 0.16% on the day, closing at ₹928.55, within a narrow trading range of ₹7.15. Notably, the stock is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a weakening technical trend and potential downward pressure.

Investor participation has risen, with delivery volumes on 20 January reaching 2.95 crore shares, a 21.4% increase over the five-day average delivery volume. This heightened activity, combined with the liquidity profile supporting trade sizes of approximately ₹70.99 crore, underscores the stock’s attractiveness for active trading and hedging strategies.

Mojo Score and Rating Revision

HDFC Bank currently holds a mojo score of 60.0, which corresponds to a Hold rating, reflecting a more cautious outlook compared to its previous Buy rating. This downgrade was effected on 12 January 2026, signalling a reassessment of the bank’s near-term prospects by analysts. The market cap grade remains at 1, consistent with its large-cap status and significant market presence, with a market capitalisation of approximately ₹14,30,381.07 crore.

The downgrade aligns with the technical weakness and the increased put option activity, suggesting that investors and analysts alike are factoring in potential headwinds, including sectoral challenges and broader market volatility.

Expiry Patterns and Investor Sentiment

The expiry date of 27 January 2026 is a critical juncture for options traders, as positions are squared off or rolled over. The heavy open interest in put options at strikes close to the current market price indicates that many investors are either hedging existing long positions or speculating on a decline. This behaviour is typical in uncertain market conditions or when investors anticipate a correction.

Given the stock’s trading below all major moving averages and the recent downgrade, the put option activity can be interpreted as a protective measure against downside risk or a bearish bet on the stock’s near-term trajectory.

Sectoral and Market Context

Within the private sector banking industry, HDFC Bank remains a bellwether stock, and its price movements often influence sector sentiment. The sector’s 0.46% decline on the day, slightly more pronounced than the Sensex’s 0.08% dip, reflects cautious investor sentiment amid macroeconomic uncertainties and regulatory developments.

HDFC Bank’s relative outperformance compared to the sector (-0.16% vs -0.46%) suggests some resilience, but the technical indicators and options market activity point to a guarded outlook.

Implications for Investors and Traders

The surge in put option volumes and open interest at strikes near the current market price suggests that investors are increasingly wary of downside risks in HDFC Bank’s shares. For long-term investors, this may signal the need to reassess portfolio exposure and consider hedging strategies to mitigate potential losses.

Traders, on the other hand, may view the elevated put activity as an opportunity to capitalise on volatility, either through directional bearish trades or by selling premium in anticipation of expiry-related price stabilisation.

Given the stock’s liquidity and active participation, HDFC Bank remains a focal point for options market strategies, with expiry dates like 27 January 2026 serving as key milestones for positioning adjustments.

Outlook and Conclusion

While HDFC Bank continues to be a dominant player in India’s private banking sector, the recent downgrade in mojo grade to Hold, combined with technical weakness and heavy put option activity, suggests a cautious near-term outlook. Investors should monitor upcoming earnings, sector developments, and macroeconomic indicators closely to gauge the stock’s trajectory beyond the January expiry.

Options market data provides valuable insight into investor sentiment, and the current pattern indicates a tilt towards protective hedging or bearish positioning. This dynamic underscores the importance of a balanced approach, combining fundamental analysis with technical and derivatives market signals to make informed investment decisions.

Key Data Summary:

• Underlying Price: ₹928.55


• Most Active Put Strikes: ₹930 (4,500 contracts), ₹910 (4,095 contracts)


• Open Interest at ₹930 Strike: 6,652 contracts


• Turnover at ₹930 Strike: ₹203.69 lakhs


• Mojo Score: 60.0 (Hold rating, downgraded from Buy on 12 Jan 2026)


• Market Cap: ₹14,30,381.07 crore (Large Cap)


• Stock trading below all major moving averages


• Sector 1D return: -0.46%, Sensex 1D return: -0.08%

Investors and traders should continue to monitor the evolving options landscape and technical indicators for HDFC Bank as the 27 January expiry approaches, adjusting strategies accordingly to navigate the prevailing market uncertainties.

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