Put Option Activity Highlights
On 19 February 2026, HDFC Bank’s put options with a strike price of ₹920 expiring on 24 February 2026 emerged as the most actively traded contracts. A total of 8,856 contracts changed hands, generating a turnover of approximately ₹296.14 lakhs. The open interest stood at 3,742 contracts, indicating sustained interest in downside protection or speculative bearish bets.
The underlying stock was valued at ₹918.90 at the time, just below the ₹920 strike, which suggests that traders are focusing on near-the-money puts to capitalise on or hedge against potential declines in the immediate term.
Price and Technical Context
HDFC Bank’s share price has been under pressure, falling by 0.83% over the last three trading sessions. The stock’s current price is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a bearish technical setup. This broad weakness across multiple timeframes often prompts investors to seek downside protection through put options.
Investor participation has also waned, with delivery volumes on 18 February dropping to 76.45 lakh shares, a sharp 64.58% decline compared to the five-day average delivery volume. This reduced participation may reflect cautious sentiment or profit-taking ahead of the expiry.
Despite the recent weakness, liquidity remains robust, with the stock’s traded value supporting sizeable trades up to ₹55.47 crore based on 2% of the five-day average traded value. This liquidity facilitates active options trading and efficient price discovery in the derivatives market.
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Bearish Positioning and Hedging Strategies
The surge in put option volumes at the ₹920 strike price suggests that traders are either speculating on a further decline or hedging long positions in HDFC Bank. Given the stock’s current market cap of ₹14,18,628 crore and its classification as a large-cap private sector bank, institutional investors often use options to manage risk amid volatile market conditions.
The put option open interest of 3,742 contracts is significant relative to the traded volume, indicating that many positions remain open and could influence price movements as expiry approaches. This open interest concentration near the current price level often acts as a magnet for price action, with the stock potentially gravitating towards the strike price to maximise option value.
Moreover, the recent downgrade in the Mojo Grade from Hold to Sell on 9 February 2026, with a current Mojo Score of 48.0, reflects deteriorating fundamentals or market sentiment. The Market Cap Grade of 1 further underscores the stock’s vulnerability in the current environment.
Sector and Market Comparison
HDFC Bank’s one-day return of -0.79% slightly outperformed the broader private sector bank sector and Sensex, both down by 0.94% on the same day. This relative resilience may be attributed to the bank’s strong franchise and market position, but the technical weakness and options activity highlight caution among traders.
Investors should note that the bank’s falling investor participation and consistent price declines over recent sessions could signal a shift in market dynamics, warranting close monitoring of upcoming earnings and macroeconomic developments.
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Implications for Investors
For investors holding HDFC Bank shares, the heightened put option activity and technical weakness suggest a cautious stance may be warranted. The stock’s current trading below all major moving averages and the downgrade in Mojo Grade indicate potential downside risks in the near term.
Those seeking to hedge their portfolios might consider put options near the ₹920 strike to protect against further declines, especially with the 24 February expiry approaching. Conversely, speculative traders could view the elevated put volumes as an opportunity to capitalise on volatility, but should remain mindful of the bank’s fundamental strength and sector positioning.
Given the bank’s large market capitalisation and liquidity, options provide an effective tool for risk management and tactical positioning. However, investors should also monitor broader market trends and sectoral developments, as private sector banks remain sensitive to macroeconomic factors such as interest rate changes and credit growth.
Outlook and Conclusion
HDFC Bank’s recent put option surge reflects a market environment characterised by uncertainty and cautious positioning. While the bank’s fundamentals remain robust, the technical signals and options market activity point to near-term challenges. Investors should weigh these factors carefully, balancing the bank’s long-term growth prospects against the current bearish sentiment.
As expiry approaches on 24 February 2026, the interplay between open interest and price action will be critical to watch. A sustained breach below the ₹920 level could trigger further downside, while a rebound above key moving averages might alleviate some bearish pressures.
In summary, HDFC Bank’s options market activity offers valuable insights into investor psychology and risk appetite, serving as a barometer for the stock’s near-term trajectory.
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