HDFC Bank Sees Robust Call Option Activity Amid Bearish Price Momentum

Recent Price Performance and Market Context

HDFC Bank’s stock price has been on a declining trajectory over the past three trading sessions, shedding approximately 5.02% in returns. On 6 January 2026, the stock closed at ₹951.10, underperforming its private sector banking peers by 0.67% and the broader Sensex index by 1.0%. The stock has traded within a narrow range of ₹9.15, reflecting subdued volatility despite the downward trend.

Technical indicators reveal that HDFC Bank is currently trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish momentum in the near term. However, rising investor participation is evident, with delivery volumes surging to 2.45 crore shares on 6 January, marking a 95.3% increase over the five-day average. This heightened activity suggests that market participants are actively repositioning ahead of the upcoming options expiry.

Call Option Activity: Strike Prices and Expiry Patterns

The most active call options for HDFC Bank are concentrated at the ₹960 and ₹1000 strike prices, both expiring on 27 January 2026. The ₹960 strike call saw 5,782 contracts traded, generating a turnover of ₹516.45 lakhs, with an open interest of 5,056 contracts. Meanwhile, the ₹1000 strike call recorded 5,023 contracts traded, with a turnover of ₹137.58 lakhs and a significantly higher open interest of 21,073 contracts.

This disparity in open interest between the two strikes indicates a strong market focus on the ₹1000 level as a key resistance or target price. The underlying stock price at ₹951.10 is currently below both strikes, suggesting that traders are positioning for a potential rebound or rally above these levels by the expiry date.

Investor Sentiment and Bullish Positioning

The heavy call option volumes at strikes above the current market price reflect a predominantly bullish sentiment among options traders. Despite the recent price weakness, investors appear to be anticipating a recovery or positive catalyst that could propel HDFC Bank’s shares beyond ₹960 and potentially towards ₹1000 within the next three weeks.

Such positioning is often indicative of speculative optimism or hedging strategies by institutional players. The elevated open interest at the ₹1000 strike, in particular, suggests that many traders are either buying calls outright or writing calls as part of complex option spreads, expecting the stock to test or surpass this psychological level.

Fundamental and Market Quality Assessment

HDFC Bank maintains its status as a large-cap heavyweight with a market capitalisation of ₹14,80,612 crore. The bank’s Mojo Score stands at a robust 80.0, reflecting strong fundamentals and market positioning. Notably, the Mojo Grade was upgraded from ‘Buy’ to ‘Strong Buy’ on 2 January 2026, underscoring improved financial metrics and positive outlooks from analysts.

Despite the recent price softness, the bank’s market cap grade remains at 1, indicating top-tier liquidity and investor interest. The stock’s liquidity profile supports sizeable trade volumes, with an average daily traded value sufficient to accommodate trades worth ₹37.18 crore comfortably. This liquidity is crucial for options traders who require efficient execution and minimal slippage.

Options Expiry and Strategic Implications

With the 27 January 2026 expiry approaching, the concentration of call option activity at the ₹960 and ₹1000 strikes suggests that market participants are closely monitoring these levels for potential breakout or reversal signals. The open interest data implies that these strikes could act as pivotal points for price action in the coming weeks.

Traders holding call options at these strikes will be watching for any fundamental news, quarterly results, or macroeconomic developments that could influence the bank’s share price trajectory. The current bearish trend may be a temporary correction within a broader bullish framework, as indicated by the strong call option interest.

Balancing Risks and Opportunities

While the call option activity signals bullish expectations, investors should remain cautious given the stock’s recent underperformance and technical weakness. The downward momentum reflected by trading below all major moving averages suggests that the stock could face further pressure if broader market conditions deteriorate.

However, the strong open interest and turnover in call options at strikes above the current price indicate that many market participants are betting on a recovery or a positive catalyst emerging before expiry. This dynamic creates a nuanced risk-reward scenario for traders and investors alike.

Conclusion

HDFC Bank Ltd.’s options market activity ahead of the 27 January 2026 expiry reveals a compelling narrative of cautious optimism. Despite a short-term bearish trend in the underlying stock, the surge in call option volumes and open interest at ₹960 and ₹1000 strikes highlights a significant bullish positioning by market participants. This suggests expectations of a rebound or positive developments in the near term.

Investors should closely monitor price action around these key strike prices and remain attentive to fundamental updates that could influence the bank’s trajectory. The combination of strong fundamentals, upgraded Mojo Grade, and active options market participation makes HDFC Bank a stock to watch as expiry approaches.

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