ICICI Bank Sees Heavy Put Option Activity Amid Bearish Hedging Ahead of Expiry

Put Option Surge Highlights Bearish Sentiment

On 23 February 2026, ICICI Bank witnessed a significant spike in put option activity, with 3,843 contracts traded at the 1,400 strike price for the expiry date of 24 February 2026. This volume translated into a turnover of approximately ₹67.79 lakhs, accompanied by an open interest of 3,530 contracts. The underlying stock price stood at ₹1,406.30, just above the strike price, indicating that traders are positioning for potential downside or hedging existing long exposures.

The concentration of put options at the 1,400 strike price, close to the current market price, suggests that investors are actively seeking protection against near-term declines or are speculating on a pullback. This activity is particularly noteworthy given the stock’s recent performance and technical indicators.

Stock Performance and Technical Context

ICICI Bank has been gaining for two consecutive days, delivering a 1.21% return over this period, which aligns closely with the private sector banking sector’s performance and slightly outpaces the Sensex’s 0.64% gain on the same day. The stock traded within a narrow range of ₹10.9, reflecting a period of consolidation amid cautious investor sentiment.

Technically, the stock price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a generally positive medium- to long-term trend. However, it is trading below its 5-day moving average, indicating some short-term pressure or profit-taking. This mixed technical picture may be contributing to the increased put option interest as traders hedge against possible short-term volatility.

Investor participation has also risen, with delivery volumes reaching 68.68 lakh shares on 20 February 2026, marking a 24.06% increase compared to the five-day average delivery volume. This heightened activity underscores growing engagement from market participants, possibly reflecting divergent views on the stock’s near-term trajectory.

Mojo Score and Market Capitalisation Insights

ICICI Bank holds a Mojo Score of 54.0, categorised as a 'Hold' rating, an improvement from its previous 'Sell' grade as of 6 February 2026. This upgrade reflects a stabilisation in the bank’s fundamentals and market positioning, though it stops short of a full endorsement for aggressive buying. The bank’s market capitalisation stands at a commanding ₹9,97,347 crore, underscoring its status as a large-cap heavyweight within the private sector banking industry.

The market cap grade of 1 indicates the stock’s significant scale and liquidity, which is further supported by its ability to handle trade sizes of approximately ₹27.15 crore based on 2% of the five-day average traded value. Such liquidity is crucial for institutional investors and traders engaging in options strategies, including hedging and speculative plays.

Interpreting the Put Option Activity: Hedging or Bearish Bets?

The surge in put option volume at the 1,400 strike price, just below the current market price, can be interpreted in multiple ways. On one hand, it may represent hedging activity by long investors seeking downside protection ahead of the expiry. On the other, it could signal speculative bearish bets anticipating a near-term correction or volatility spike.

Given the stock’s recent upward momentum and technical support levels, the put buying may be a prudent risk management tool rather than outright bearish sentiment. However, the concentration of open interest and turnover in puts suggests that market participants are preparing for a range-bound or slightly negative scenario in the short term.

Expiry patterns also play a role, as the 24 February 2026 expiry is imminent, prompting traders to adjust positions and hedge exposures accordingly. The relatively high open interest in puts compared to calls at this strike price highlights a skew towards downside protection.

Sector and Market Context

ICICI Bank’s performance is broadly in line with the private sector banking sector, which has shown resilience amid macroeconomic uncertainties and evolving regulatory landscapes. The sector’s 1-day return of 0.76% closely matches ICICI Bank’s 0.77%, indicating that the bank is moving in tandem with its peers.

Meanwhile, the broader Sensex index’s 0.64% gain reflects a cautiously optimistic market mood, with investors balancing growth prospects against inflationary pressures and global economic concerns. Within this environment, the active put option trading in ICICI Bank may be a reflection of prudent risk management rather than outright pessimism.

Investor Takeaways and Outlook

For investors and traders, the heavy put option activity in ICICI Bank warrants close monitoring. The stock’s technical positioning above key moving averages suggests underlying strength, yet the short-term dip below the 5-day average and concentrated put interest indicate potential volatility ahead.

Those holding long positions may consider the 1,400 strike price puts as a cost-effective hedge against downside risk, especially with the expiry imminent. Conversely, speculative traders might view the put volume as an opportunity to capitalise on short-term price fluctuations.

Given the bank’s large-cap status, liquidity, and improving Mojo Grade, it remains a core holding for many portfolios, but the current options activity advises a measured approach with risk management strategies firmly in place.

Overall, ICICI Bank’s options market activity reflects a nuanced market sentiment—balancing optimism about the bank’s fundamentals and sectoral strength with caution amid broader market uncertainties.

Conclusion

ICICI Bank Ltd.’s position as the most active stock in put options trading ahead of the 24 February 2026 expiry highlights the complex dynamics at play in the market. While the stock continues to perform in line with its sector and maintains a 'Hold' rating with improving fundamentals, the surge in put contracts signals that investors are actively managing risk and preparing for possible near-term volatility. This duality underscores the importance of a balanced investment approach, combining confidence in the bank’s long-term prospects with prudent hedging to navigate short-term uncertainties.

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