Intense Put Option Trading at Critical Strikes
Data from the derivatives market reveals that HDFC Bank’s put options have been the most actively traded among stocks, with significant volumes concentrated at the ₹900, ₹920, and ₹930 strike prices expiring on 27 January 2026. The ₹900 strike saw the highest number of contracts traded at 3,656, accompanied by an open interest of 11,438 contracts, indicating substantial investor interest in downside protection or speculative bearish bets at this level.
The ₹920 strike price recorded 4,632 contracts traded with an open interest of 5,202, while the ₹930 strike had 3,533 contracts traded and an open interest of 6,258. The underlying stock price stood at ₹922.6 on 20 January 2026, placing these strikes close to the current market price and highlighting the strategic positioning of traders around near-the-money puts.
Turnover and Market Impact
The turnover for these put options is substantial, with the ₹930 strike generating ₹246.59 lakhs, the ₹920 strike ₹195.40 lakhs, and the ₹900 strike ₹61.33 lakhs. This level of activity underscores a heightened focus on downside risk management or speculative bearish strategies as the expiry date approaches.
Such concentrated put option activity often signals investor caution or anticipation of volatility, especially when combined with the stock’s recent price performance and technical indicators.
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Bearish Positioning and Hedging Implications
The elevated open interest and volume in put options near the current stock price suggest that market participants are either hedging existing long positions or speculating on a potential decline in HDFC Bank’s share price. The stock has underperformed its sector by 0.27% on the day, with a one-day return of -0.63% compared to the sector’s -0.31% and Sensex’s -0.50%.
Moreover, HDFC Bank has experienced a consecutive two-day decline, losing 1.04% over this period. The stock is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, reinforcing the technical bearishness. Rising investor participation, as evidenced by a 6.95% increase in delivery volume to 2.7 crore shares on 19 January, indicates active trading interest amid this downtrend.
Market Capitalisation and Rating Context
HDFC Bank remains a large-cap entity with a market capitalisation of ₹14,27,073 crore. However, MarketsMOJO recently downgraded its mojo grade from Buy to Hold on 12 January 2026, reflecting a more cautious outlook. The mojo score stands at 60.0, with a market cap grade of 1, signalling moderate quality and valuation concerns relative to peers.
This rating adjustment aligns with the observed put option activity, as investors recalibrate expectations amid evolving market conditions and sectoral pressures.
Liquidity and Trading Viability
Liquidity remains robust for HDFC Bank, with the stock’s traded value supporting trade sizes up to ₹64.19 crore based on 2% of the five-day average traded value. This ensures that both institutional and retail investors can execute sizeable trades without significant market impact, facilitating the active options market seen currently.
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Expiry Patterns and Strategic Outlook
The expiry on 27 January 2026 is a focal point for traders, with the clustering of put option open interest at strikes just below and above the current price suggesting a key support zone between ₹900 and ₹930. Should the stock breach these levels, the put options could see further activity, potentially driving volatility.
Investors should monitor the evolving open interest and volume trends in the coming sessions to gauge shifts in market sentiment. The current positioning indicates a tilt towards caution, with hedging strategies likely to dominate until clearer directional cues emerge.
Conclusion: Cautious Sentiment Prevails
In summary, HDFC Bank’s derivatives market activity reveals a pronounced increase in put option trading, signalling investor apprehension amid recent price weakness and technical underperformance. The downgrade to a Hold rating by MarketsMOJO further underscores the tempered outlook.
While the bank’s fundamentals remain strong given its large-cap status and sector leadership, the options market suggests that participants are bracing for potential near-term volatility or downside risk. Investors should weigh these signals carefully, balancing hedging needs with long-term investment perspectives.
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