HDFC Bank Sees Surge in Call Option Activity Ahead of February Expiry

Robust Call Option Trading Highlights Investor Sentiment

The most active call options for HDFC Bank Ltd. (stock code 592009) are concentrated at the ₹930 strike price, with 9,920 contracts traded recently. This surge in call option volume has generated a turnover of ₹913.88 lakhs, reflecting strong investor interest in leveraged bullish bets on the stock. Open interest at this strike stands at 5,800 contracts, indicating sustained positions held by traders anticipating upward price movement.

Currently, the underlying stock is trading at ₹925.05, just below the ₹930 strike, suggesting that market participants are positioning for a potential breakout above this level by the February expiry. The expiry date of 24 February 2026 is less than a month away, adding urgency to these option trades as investors seek to capitalise on near-term price action.

Stock Performance and Technical Context

On the day of analysis, HDFC Bank outperformed its sector by 0.25%, registering a modest 0.12% gain compared to the sector’s 0.04% decline and the Sensex’s 0.23% rise. This slight outperformance follows a two-day consecutive fall, marking a tentative trend reversal. However, the stock remains below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling persistent downward pressure in the medium to long term.

Investor participation appears to be waning, with delivery volume on 30 January falling by 12.71% against the five-day average, registering 2.22 crore shares. Despite this, liquidity remains adequate, with the stock’s traded value supporting sizeable trades up to ₹60.73 crore, ensuring smooth execution for institutional and retail investors alike.

Mojo Score Downgrade Reflects Caution

MarketsMOJO’s latest assessment downgraded HDFC Bank’s mojo grade from Hold to Sell on 28 January 2026, assigning a mojo score of 48.0. The market cap grade remains at 1, reflecting its status as a large-cap stock with a market capitalisation of ₹14,27,937 crore. This downgrade underscores concerns over the bank’s near-term outlook amid challenging macroeconomic conditions and sectoral headwinds.

Investor Positioning and Expiry Dynamics

The concentration of call option activity at the ₹930 strike price, just above the current market price, suggests that traders are betting on a near-term rally. The open interest of 5,800 contracts indicates that many investors are holding onto these bullish positions rather than closing them out, which could translate into upward price pressure as expiry approaches.

Given the proximity of the strike to the current price, the option premium is likely to be sensitive to any positive news flow or sectoral momentum. However, the stock’s position below all major moving averages tempers enthusiasm, as technical resistance levels remain intact. This dichotomy between option market optimism and technical caution is a key feature of the current trading environment for HDFC Bank.

Sectoral and Market Context

Within the private sector banking industry, HDFC Bank remains a dominant player but faces increasing competition and regulatory scrutiny. The sector has shown mixed performance recently, with some peers outperforming on strong credit growth and digital initiatives. HDFC Bank’s slight outperformance on the day is encouraging but must be weighed against its recent mojo downgrade and subdued investor participation.

Market participants should also consider broader macroeconomic factors, including interest rate trends and credit demand, which will influence the bank’s earnings trajectory and, by extension, its stock performance.

Implications for Investors

For investors, the heightened call option activity at the ₹930 strike price signals a cautiously optimistic outlook among traders, who appear to be positioning for a rebound in HDFC Bank’s share price. However, the technical backdrop and mojo downgrade counsel prudence. The stock’s failure to breach key moving averages suggests that any rally may face resistance, and the decline in delivery volumes points to reduced conviction among long-term holders.

Investors should monitor the stock’s price action closely in the coming weeks, particularly as the 24 February expiry approaches. A sustained move above ₹930 could validate the bullish sentiment embedded in the options market, while a failure to do so may reinforce the current cautious stance.

Given the bank’s large-cap status and significant market capitalisation, it remains a core holding for many portfolios, but the current mixed signals highlight the importance of a balanced approach, combining technical analysis with fundamental insights.

Outlook and Conclusion

HDFC Bank Ltd. is at a critical juncture, with option market activity suggesting potential upside while technical indicators and mojo ratings urge caution. The interplay between these factors will shape investor sentiment and price direction in the near term. Market participants should weigh the bullish positioning in call options against the broader market context and the bank’s recent performance metrics before making investment decisions.

As expiry nears, volatility may increase, offering opportunities for both traders and long-term investors to capitalise on price movements. Staying informed on sector developments and macroeconomic trends will be essential to navigate the evolving landscape surrounding HDFC Bank.

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