Put Option Activity Highlights Growing Caution
On 9 February 2026, HDFC Bank’s put options at the ₹930 strike price emerged as the most actively traded contracts, with 1,954 contracts changing hands. This translated into a turnover of approximately ₹90.81 lakhs and an open interest of 3,881 contracts, underscoring significant investor interest in downside protection or speculative bearish positioning ahead of the February expiry. The underlying stock was trading at ₹936.3, just above the strike price, indicating that traders are positioning for a potential dip below this level.
Stock Performance and Technical Context
HDFC Bank’s stock has underperformed its sector by 0.28% on the day, with a one-day return of -0.11% compared to the sector’s 0.10% and the Sensex’s 0.32% gains. The stock has been on a four-day losing streak, shedding 1.79% over this period. Technical indicators reveal a mixed picture: the price remains above the 20-day moving average but is trading below the 5-day, 50-day, 100-day, and 200-day moving averages. This suggests short-term weakness amid longer-term consolidation.
Investor participation appears to be waning, with delivery volumes on 9 February falling by 16.67% to 1.78 crore shares compared to the five-day average. Despite this, liquidity remains robust, with the stock’s traded value supporting sizeable transactions up to ₹57.85 crore, making it accessible for institutional and retail traders alike.
Mojo Score and Market Sentiment
MarketsMOJO assigns HDFC Bank a Mojo Score of 48.0, categorising it as a Sell with a recent downgrade from Hold on 9 February 2026. The bank’s market cap grade is rated 1, reflecting its large-cap status with a market capitalisation of ₹14,40,709.46 crore. This downgrade aligns with the increased put option activity, signalling a shift in analyst sentiment and investor caution.
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Expiry Patterns and Investor Positioning
The 24 February 2026 expiry date is attracting significant open interest in put options, suggesting that investors are hedging against potential downside risks in the near term. The concentration of activity at the ₹930 strike price, slightly below the current market price, indicates a key support level that traders are watching closely. Should the stock breach this level, it could trigger further selling pressure.
Put option buying often reflects a bearish outlook or a desire to protect existing long positions. Given HDFC Bank’s recent four-day decline and technical weakness, the elevated put activity may be a response to concerns over broader macroeconomic factors or sector-specific challenges. The private sector banking industry has faced headwinds from rising credit costs and regulatory scrutiny, which could be weighing on investor confidence.
Comparative Sector and Market Analysis
While HDFC Bank has underperformed its sector marginally, the broader private sector banking space continues to show resilience. However, the bank’s downgrade and increased bearish positioning contrast with some peers maintaining stable or positive outlooks. This divergence may reflect company-specific risks or valuation concerns given HDFC Bank’s premium market cap and historical leadership in the sector.
Investors should also consider the broader market context, where the Sensex has posted modest gains, suggesting selective profit-taking or rotation within financial stocks. The bank’s liquidity profile remains strong, supporting active trading and efficient price discovery despite recent volatility.
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Investor Implications and Outlook
For investors, the heightened put option activity in HDFC Bank signals a cautious stance. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the current option activity as an opportunity to capitalise on potential declines, especially if the stock breaks below key technical support.
However, it is important to balance this bearish positioning with the bank’s strong fundamentals and dominant market position. The recent downgrade to Sell by MarketsMOJO reflects near-term concerns but does not negate the bank’s long-term growth prospects. Investors should monitor upcoming earnings, sector developments, and macroeconomic indicators closely to reassess their stance.
Conclusion
In summary, HDFC Bank’s surge in put option trading at the ₹930 strike price for the 24 February expiry highlights growing investor caution amid recent price weakness and a downgrade in sentiment. While the bank remains a large-cap heavyweight with robust liquidity, the technical and options market signals suggest a period of heightened volatility and potential downside risk in the near term. Market participants should remain vigilant and consider hedging strategies or peer comparisons to optimise their portfolios.
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