ICICI Bank Sees Heavy Put Option Activity Ahead of February Expiry

Heavy Put Option Trading Signals Bearish Hedging

The put option with a strike price of ₹1400 expiring on 24 February 2026 witnessed a remarkable 6,428 contracts traded, generating a turnover of ₹312.72 lakhs. Open interest remains elevated at 6,178 contracts, indicating sustained bearish positioning or protective hedging by investors. This activity is notable given the underlying stock price of ICICI Bank currently stands at ₹1422.6, just above the strike price, suggesting that traders are bracing for possible near-term volatility or a price correction.

Stock Performance and Technical Context

Despite the surge in put option activity, ICICI Bank’s stock has demonstrated resilience in the broader market. On 12 February 2026, the stock outperformed its sector by 1.02%, delivering a 1.15% gain compared to the Private Sector Bank sector’s modest 0.11% rise and the Sensex’s decline of 0.36%. The bank’s share price is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a strong technical uptrend.

Investor participation has also increased, with delivery volumes reaching 85.28 lakh shares on 11 February, a 10.56% rise over the five-day average. Liquidity remains robust, supporting trade sizes up to ₹34.51 crore based on 2% of the five-day average traded value, which facilitates active options and equity trading.

Mojo Score Upgrade Reflects Mixed Sentiment

ICICI Bank’s MarketsMOJO score currently stands at 54.0, reflecting a ‘Hold’ rating, an improvement from a previous ‘Sell’ grade assigned on 6 February 2026. This upgrade suggests a cautious optimism among analysts, balancing the bank’s strong fundamentals and technical momentum against the increased put option activity that hints at investor concerns over near-term downside risks.

The bank’s market capitalisation remains substantial at ₹10,19,098 crore, firmly placing it in the large-cap category. However, its market cap grade is rated at 1, indicating limited upside potential relative to its size and valuation metrics. This combination of factors may explain why some investors are seeking downside protection through put options despite the stock’s recent gains.

Expiry Patterns and Investor Behaviour

The 24 February 2026 expiry is attracting significant attention, with the 1400 strike price put options dominating activity. This strike is slightly below the current market price, suggesting that traders are either hedging existing long positions or speculating on a moderate pullback. The open interest data corroborates this, showing that many contracts remain open, which could translate into increased volatility as expiry approaches.

Such patterns are common in large-cap banking stocks, where institutional investors often use options to manage risk amid macroeconomic uncertainties or sector-specific developments. The private sector banking space has been under scrutiny due to evolving regulatory frameworks and credit growth dynamics, factors that may be influencing the cautious stance observed in ICICI Bank’s options market.

Comparative Sector and Market Analysis

While ICICI Bank has outperformed its sector peers on the day, the broader Private Sector Bank sector has shown muted gains, and the Sensex has declined. This divergence highlights the bank’s relative strength but also underscores the market’s mixed sentiment. Investors appear to be balancing optimism about ICICI Bank’s operational performance with concerns about external risks, as reflected in the elevated put option volumes.

Given the bank’s strong technical positioning and improving mojo grade, the current put option activity may be viewed as prudent risk management rather than outright bearishness. However, the sizeable turnover and open interest at the 1400 strike price warrant close monitoring, as any sharp price movement below this level could trigger further downside pressure.

Investor Takeaway and Outlook

For investors, the current scenario presents a nuanced picture. ICICI Bank’s strong technicals and recent mojo upgrade suggest a stable medium-term outlook. However, the heavy put option activity at the 1400 strike price ahead of the February expiry signals caution, possibly reflecting concerns about short-term volatility or sector headwinds.

Those holding long positions may consider the put options as a cost-effective hedge against downside risk, while new investors should weigh the bank’s fundamentals against the potential for near-term price fluctuations. Monitoring open interest and volume trends in the options market will be crucial in gauging shifts in market sentiment as expiry approaches.

Overall, ICICI Bank remains a key bellwether in the private sector banking space, with its options market activity providing valuable insights into investor psychology and risk appetite in the current market environment.

Conclusion

ICICI Bank’s prominence in the put options market ahead of the 24 February expiry highlights a strategic hedging approach by investors amid mixed signals from technical and fundamental indicators. While the stock’s outperformance and mojo upgrade offer reasons for optimism, the elevated put volumes and open interest at the ₹1400 strike price underscore a cautious stance. Investors should remain vigilant and consider both the upside potential and downside risks as they navigate the evolving market landscape.

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