Put Option Activity Highlights
On 4 February 2026, HDFC Bank’s put options with a strike price of ₹950 expiring on 24 February 2026 emerged as the most actively traded contracts in the segment. A total of 3,015 contracts changed hands, generating a turnover of ₹209.1 lakhs. Open interest in these puts stands at 4,373 contracts, indicating sustained interest and potential accumulation of bearish bets or protective hedges.
The underlying stock price at the time was ₹952.35, hovering just above the ₹950 strike, which is a psychologically significant level for traders. The concentration of put activity at this strike suggests that market participants are positioning for a possible downside or seeking insurance against a decline below this level in the near term.
Stock Performance and Technical Context
HDFC Bank’s stock has been on a modest upward trajectory, gaining 3.2% over the past three trading sessions. The stock’s price movement has been relatively narrow, confined within a range of ₹5.45, reflecting a period of consolidation. It currently trades above its 5-day and 20-day moving averages but remains below the longer-term 50-day, 100-day, and 200-day averages, indicating mixed technical signals.
Investor participation has been rising, with delivery volumes reaching 3.45 crore shares on 3 February, a 46.87% increase compared to the five-day average. This heightened activity underscores growing interest in the stock, although the cautious option positioning suggests some investors are hedging against potential volatility.
Liquidity remains robust, with the stock’s traded value supporting trade sizes up to ₹60.44 crore based on 2% of the five-day average traded value, making it accessible for institutional and retail investors alike.
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Market Cap and Mojo Ratings
HDFC Bank commands a substantial market capitalisation of ₹14,65,099.58 crore, firmly placing it in the large-cap category. The company’s Mojo Score currently stands at 54.0, reflecting a Hold rating, an improvement from a Sell rating assigned on 3 February 2026. This upgrade indicates a more neutral stance by analysts, balancing the bank’s solid fundamentals against near-term uncertainties.
The Market Cap Grade is rated 1, signalling the bank’s dominant position in the private sector banking industry. Despite the recent upgrade, the modest Mojo Score suggests investors should remain vigilant, especially given the mixed technical indicators and the surge in put option interest.
Sector and Broader Market Comparison
On the day of analysis, HDFC Bank’s stock recorded a 0.36% gain, slightly underperforming the private sector banking sector’s 0.52% rise and marginally outperforming the Sensex’s 0.23% increase. This relative performance highlights the bank’s steady but cautious momentum amid broader market movements.
The private sector banking sector continues to attract investor attention due to its growth prospects and resilience, but the increased put option activity in HDFC Bank suggests some market participants are hedging against sector-specific or macroeconomic risks.
Expiry Patterns and Investor Sentiment
The 24 February 2026 expiry date for the active put options is less than three weeks away, a timeframe that often sees heightened volatility as traders adjust positions ahead of contract settlement. The concentration of put contracts at the ₹950 strike price, close to the current market price, indicates a critical support level that investors are watching closely.
Such activity can be interpreted as a protective measure by long investors seeking downside insurance or as speculative bearish bets anticipating a correction. Given the stock’s recent gains and technical positioning, the latter scenario cannot be ruled out, especially if broader market conditions deteriorate.
Implications for Investors
For investors, the surge in put option volume at a near-the-money strike price signals the need for caution. While HDFC Bank’s fundamentals remain strong, the mixed technical signals and increased hedging activity suggest potential volatility in the short term.
Long-term investors may view this as an opportunity to reassess risk exposure and consider protective strategies, while traders might look to capitalise on expected price swings around the February expiry. Monitoring open interest changes and price action in the coming days will be crucial to gauge market direction.
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Conclusion: Balancing Opportunity and Risk
HDFC Bank Ltd. remains a cornerstone of India’s private banking sector, supported by strong market capitalisation and improving analyst sentiment. However, the recent surge in put option activity at the ₹950 strike price ahead of the 24 February expiry highlights a cautious undercurrent among investors.
While the stock has shown resilience with a three-day gain and rising investor participation, the mixed technical signals and increased hedging suggest that volatility may be on the horizon. Investors should weigh these factors carefully, balancing the bank’s long-term growth prospects against near-term risks.
Close monitoring of option market dynamics and price movements will be essential for making informed decisions in the coming weeks.
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