HDFC Bank Sees Significant Put Option Activity Ahead of December Expiry

Put Option Activity Highlights

Data from the derivatives segment reveals that the most actively traded put options for HDFC Bank are concentrated at the ₹990 strike price, with 11,514 contracts changing hands. The turnover for these contracts reached approximately ₹28.31 crores, signalling substantial investor interest in downside protection or bearish positioning. Open interest at this strike stands at 2,787 contracts, indicating a sustained level of outstanding positions as expiry approaches.

The underlying stock price was recorded at ₹990.5, placing the ₹990 strike almost at-the-money. This proximity suggests that market participants are hedging against potential declines or speculating on a near-term correction. The expiry date of 30 December 2025 is just days away, which often leads to heightened option activity as traders adjust their positions ahead of contract settlement.

Price and Technical Context

HDFC Bank’s stock price is currently about 3.08% below its 52-week high of ₹1,020.5. After four consecutive sessions of gains, the stock has experienced a mild retreat, underperforming its sector by 0.33% on the latest trading day. The price has traded within a narrow range of ₹9.5, reflecting a period of consolidation amid mixed momentum.

From a moving average perspective, the stock is trading above its 5-day, 100-day, and 200-day moving averages, which typically indicate underlying strength. However, it remains below the 20-day and 50-day moving averages, suggesting some near-term resistance and potential for volatility. This technical setup may be contributing to the increased put option interest as investors seek to manage risk.

Investor Participation and Liquidity

Delivery volume on 24 December was recorded at 61.3 lakh shares, marking a decline of 51.08% compared to the five-day average delivery volume. This reduction in investor participation could be a sign of cautious sentiment or profit-booking after recent gains. Despite this, liquidity remains adequate, with the stock’s traded value supporting trade sizes up to ₹35.43 crores based on 2% of the five-day average traded value, ensuring that options and stock trades can be executed efficiently.

Market Capitalisation and Sector Positioning

HDFC Bank is classified as a large-cap stock with a market capitalisation of approximately ₹15,29,535 crores. It operates within the private sector banking industry, a segment that has shown resilience amid evolving economic conditions. The bank’s size and sector affiliation make it a key component of benchmark indices, influencing broader market sentiment.

Interpreting the Put Option Interest

The concentration of put option contracts at the ₹990 strike price, close to the current market price, suggests that investors are positioning for potential downside risk or hedging existing long positions. Such activity is common when stocks approach critical technical levels or when market participants anticipate increased volatility around expiry dates.

Given the stock’s recent price behaviour—trading near its yearly highs but showing signs of a short-term pullback—this put option interest may reflect a cautious approach. Traders could be seeking protection against a possible correction or preparing for profit-taking scenarios. The open interest figures reinforce that these positions are not merely speculative but represent a meaningful segment of market sentiment.

Expiry Patterns and Implications

With the 30 December 2025 expiry imminent, option traders often adjust their portfolios to manage risk or capitalise on expected price movements. The high turnover and open interest in put options at the ₹990 strike indicate that this level is a focal point for market participants. The expiry week typically sees increased volatility as positions are squared off or rolled forward, which could influence the stock’s price trajectory in the short term.

Investors and traders should monitor the stock’s price action relative to this strike price and expiry date, as it may provide clues about market expectations and potential support or resistance zones.

Comparative Performance and Sector Dynamics

On the day of analysis, HDFC Bank’s stock recorded a decline of 0.72%, which was slightly more pronounced than the private sector banking sector’s fall of 0.35% and the Sensex’s dip of 0.37%. This relative underperformance may be contributing to the cautious positioning observed in the options market.

Despite this, the bank’s overall trend remains supported by its long-term moving averages, suggesting that the recent pullback could be a temporary consolidation rather than a sustained downtrend. Market participants will be watching closely for signs of renewed momentum or further weakness in the coming sessions.

Investor Takeaways

For investors, the heightened put option activity at the ₹990 strike price ahead of the December expiry signals a period of uncertainty and risk management. Those holding HDFC Bank shares may consider the implications of this options market behaviour as part of their portfolio strategy, particularly in light of the stock’s proximity to its yearly highs and mixed technical indicators.

Traders looking to capitalise on volatility should be mindful of the expiry timeline and the potential for price swings as positions are adjusted. The liquidity profile of the stock supports active trading, but careful analysis of price action and market sentiment remains essential.

Overall, the options market data provides valuable insight into investor expectations and risk appetite for one of India’s largest private sector banks as it navigates the final days of 2025.

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