ICICI Bank Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the derivatives market reveals that ICICI Bank’s put options with strike prices of ₹1,360 and ₹1,350 have been the most actively traded contracts for the expiry on 27 January 2026. Specifically, the ₹1,350 strike put saw 6,692 contracts traded, generating a turnover of approximately ₹289.5 lakhs, while the ₹1,360 strike put recorded 6,367 contracts traded with a turnover of ₹441.7 lakhs. Open interest for these strikes remains elevated at 2,712 and 2,546 contracts respectively, indicating sustained investor interest in downside protection.

The underlying stock price currently stands at ₹1,355.5, placing these strike prices just around the money. This proximity suggests that traders are positioning for potential declines or hedging existing long exposures in anticipation of near-term volatility. The concentration of put activity at these levels is a classic indicator of bearish sentiment or risk management strategies ahead of the expiry date.

Recent Price Performance and Technical Context

ICICI Bank has underperformed its sector, falling by 1.59% on the day and lagging the private sector banking index by 1.08%. The stock has been on a downward trajectory for five consecutive sessions, losing 5.66% over this period. It currently trades below all major moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a bearish technical setup.

Investor participation has also waned, with delivery volumes on 20 January 2026 falling by 2.58% compared to the five-day average, registering at 93.94 lakh shares. Despite this, liquidity remains sufficient for sizeable trades, with the stock’s average traded value supporting transactions up to ₹45.84 crore comfortably.

Fundamental and Market Positioning

ICICI Bank, with a market capitalisation of ₹9,84,140 crore, is classified as a large-cap stock within the private sector banking industry. The company’s Mojo Score currently stands at 54.0, reflecting a Hold rating, an improvement from a previous Sell grade assigned on 5 January 2026. This upgrade suggests a cautious optimism among analysts, though the stock’s recent price action and option market behaviour indicate that investors remain wary of near-term risks.

Investor Sentiment and Hedging Strategies

The pronounced activity in put options at strike prices near the current market level is indicative of investors seeking downside protection or speculating on further declines. Put options serve as insurance for long stock holdings, allowing investors to limit losses if the share price falls below the strike price. The open interest figures suggest that many market participants are either initiating bearish bets or hedging existing positions.

Given the expiry date of 27 January 2026, the timing of this activity is critical. As expiry approaches, option traders often adjust their positions to manage risk or capitalise on expected volatility. The clustering of put contracts at ₹1,350 and ₹1,360 strikes points to a consensus that the stock may test or breach these levels in the short term.

Comparative Sector and Market Performance

ICICI Bank’s underperformance relative to its sector and the broader Sensex index adds context to the bearish option positioning. While the Sensex declined by a modest 0.16% and the private sector banking sector index fell 0.46% on the day, ICICI Bank’s sharper 1.37% drop highlights stock-specific pressures. This divergence often prompts investors to seek protective puts to mitigate downside risk.

Moreover, the stock’s trading below all key moving averages signals a weakening trend, which may further fuel bearish sentiment. Technical analysts often view such patterns as confirmation of a downtrend, encouraging option traders to adopt defensive strategies.

Outlook and Investor Considerations

While ICICI Bank’s recent upgrade from Sell to Hold by MarketsMOJO reflects some improvement in fundamentals or outlook, the prevailing market sentiment remains cautious. The heavy put option activity near current price levels underscores investor concerns about potential downside risks in the near term. Traders and portfolio managers should closely monitor price action around the ₹1,350 to ₹1,360 range, as a breach could trigger further selling pressure.

Investors with existing long positions may consider protective put options to hedge against volatility, while speculative traders might view the elevated put volumes as an opportunity to capitalise on expected price swings. However, given the stock’s liquidity and large market capitalisation, any significant moves are likely to be well-absorbed by the market.

In summary, ICICI Bank’s option market activity provides a valuable barometer of investor sentiment, highlighting a tilt towards caution and risk management. Market participants should weigh these signals alongside fundamental and technical factors when making investment decisions.

Key Metrics at a Glance

• Current Price: ₹1,355.5

• Most Active Put Strikes: ₹1,350 (6,692 contracts), ₹1,360 (6,367 contracts)

• Open Interest: 2,712 (₹1,350 strike), 2,546 (₹1,360 strike)

• Turnover: ₹289.5 lakhs (₹1,350 strike), ₹441.7 lakhs (₹1,360 strike)

• Market Cap: ₹9,84,140 crore

• Mojo Score: 54.0 (Hold, upgraded from Sell on 5 Jan 2026)

• Price Performance: -1.37% (1-day), -5.66% (5-day)

• Sector Performance: -0.46% (1-day)

• Sensex Performance: -0.16% (1-day)

Investors should remain vigilant as expiry approaches, with option market dynamics offering critical insights into evolving market expectations for ICICI Bank Ltd.

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