ICICI Bank Sees Heavy Put Option Activity Ahead of January Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that ICICI Bank’s put options expiring on 27 January 2026 have attracted substantial volumes, particularly at strike prices of ₹1400, ₹1420, and ₹1440. The most actively traded put contract was at the ₹1400 strike, with 2,992 contracts exchanged, generating a turnover of approximately ₹322.33 lakhs and an open interest of 4,452 contracts. This level of open interest indicates a strong build-up of bearish bets or protective hedges close to the current underlying price of ₹1417.5.

Close behind, the ₹1440 strike saw 2,679 contracts traded, with a turnover of ₹626.91 lakhs and an open interest of 1,694 contracts. The ₹1420 strike also recorded significant activity, with 2,476 contracts traded and a turnover of ₹400.54 lakhs, alongside an open interest of 3,013 contracts. The concentration of put option volumes around these strike prices, which bracket the current market price, suggests that market participants are positioning for potential downside or volatility in the near term.

Stock Performance and Market Context

On 8 January 2026, ICICI Bank’s stock price declined by 1.17%, underperforming its private sector banking peers by 0.66% and the broader Sensex by 0.98%. This drop came after five consecutive days of gains, signalling a possible trend reversal. Despite this, the stock remains above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating that the medium to long-term technical trend remains intact.

Investor participation has notably increased, with delivery volumes rising by 49.07% to 1.16 crore shares compared to the five-day average. This heightened activity, combined with the stock’s liquidity supporting trade sizes up to ₹38.65 crore, underscores robust market interest amid the current volatility.

Implications of Put Option Concentration

The clustering of put option open interest near the ₹1400 to ₹1440 range, close to the current spot price, is often interpreted as a sign of investor caution. Traders may be using these puts either as a hedge against existing long positions or as outright bearish bets anticipating a price correction. The sizeable open interest at the ₹1400 strike, in particular, suggests a key support level that market participants are watching closely.

Given the expiry date of 27 January 2026, these positions could influence price action in the coming weeks, especially as traders adjust their portfolios ahead of the options expiry. The elevated turnover in these put contracts, totalling over ₹1,350 lakhs across the three strikes, reflects active repositioning and risk management strategies among institutional and retail investors alike.

Mojo Score and Analyst Ratings

ICICI Bank currently holds a Mojo Score of 54.0, placing it in the ‘Hold’ category, an upgrade from a previous ‘Sell’ rating as of 5 January 2026. This shift indicates a moderate improvement in the bank’s fundamental and technical outlook, although the score suggests limited upside potential in the near term. The bank’s market capitalisation stands at a robust ₹10,26,415 crore, affirming its status as a large-cap heavyweight within the private sector banking industry.

Despite the recent downgrade in short-term price momentum, the stock’s relative strength compared to the sector and Sensex remains a point of interest for investors weighing risk versus reward. The combination of technical support levels and put option hedging activity suggests a cautious but watchful market stance.

Broader Market and Sector Considerations

The private sector banking sector has experienced mixed performance recently, with ICICI Bank’s 1-day return of -1.17% slightly underperforming the sector’s -0.61% and the Sensex’s marginal decline of -0.19%. This relative weakness may be contributing to the increased put option interest as investors seek downside protection amid concerns over macroeconomic factors or sector-specific challenges.

However, the bank’s strong technical positioning above multiple moving averages and rising delivery volumes indicate underlying investor confidence in its long-term prospects. The juxtaposition of these factors creates a nuanced market environment where hedging activity is prudent, but outright bearishness is not yet dominant.

Expiry Patterns and Investor Strategy

Options expiry dates often act as focal points for volatility and price discovery. The 27 January 2026 expiry is no exception, with the concentration of put option open interest suggesting that traders are bracing for potential price swings. Investors holding long positions may be utilising these puts as insurance, while speculative traders could be positioning for a pullback or increased volatility.

Given the stock’s recent narrow trading range of ₹13.9 and the elevated liquidity supporting sizeable trades, market participants have the flexibility to adjust their positions dynamically. The interplay between technical support levels and options market activity will be critical to monitor in the coming weeks.

Conclusion

ICICI Bank Ltd.’s heavy put option activity ahead of the January expiry highlights a cautious market stance despite the stock’s solid technical foundation. The significant open interest and turnover at strike prices near the current market value indicate that investors are actively hedging or positioning for potential downside risks. While the bank’s Mojo Score upgrade to ‘Hold’ reflects improving fundamentals, the recent price underperformance and options market data suggest that volatility and uncertainty remain key themes.

For investors, understanding the dynamics of put option concentrations and expiry patterns is essential to navigating the evolving risk landscape. Monitoring open interest changes and price action around key strike prices will provide valuable insights into market sentiment and potential support levels for ICICI Bank in the near term.

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