ICICI Bank Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Surge Reflects Market Caution

On 29 January 2026, ICICI Bank’s put options with a strike price of ₹1360 expiring on 24 February 2026 emerged as the most actively traded contracts in the segment. A total of 6,238 contracts changed hands, generating a turnover of approximately ₹934.89 lakhs. The open interest for these puts stands at 1,831 contracts, indicating sustained interest and positioning by market participants.

This heightened put activity suggests that investors are either hedging existing long positions or speculating on a potential decline in the stock price over the coming weeks. The underlying stock price at the time was ₹1361.3, almost at the strike price, which adds to the significance of this option level as a key support or resistance point.

Stock Performance and Technical Indicators

ICICI Bank’s stock price underperformed its sector by 1.09% on the day, declining 1.76% compared to the sector’s 0.67% fall and the Sensex’s modest 0.37% drop. This underperformance follows a three-day rally, marking a potential trend reversal. The stock currently trades above its 5-day moving average but remains below its 20-day, 50-day, 100-day, and 200-day moving averages, indicating mixed technical signals and a cautious medium-term outlook.

Investor participation has notably increased, with delivery volumes rising to 1.65 crore shares on 29 January, a 43.25% jump over the five-day average. This surge in delivery volume suggests that investors are actively taking positions, possibly adjusting portfolios in response to recent volatility and option market signals.

Market Capitalisation and Quality Assessment

ICICI Bank is a large-cap stock with a market capitalisation of ₹9,84,180 crore, classified under the private sector banking industry. The company holds a Mojo Score of 54.0, reflecting a Hold rating, an improvement from a previous Sell grade assigned on 5 January 2026. Despite this upgrade, the bank’s market cap grade remains at 1, indicating that while it is a large-cap entity, its valuation or momentum metrics may not be fully compelling at present.

Expiry Patterns and Investor Positioning

The 24 February 2026 expiry date for the put options is less than a month away, intensifying the focus on near-term price movements. The concentration of put contracts at ₹1360 strike price, very close to the current market price, indicates a critical level where investors expect either support or a potential breakdown.

Open interest data reveals that traders are maintaining or increasing bearish positions, possibly anticipating volatility or a correction in the banking sector. This is consistent with the stock’s recent underperformance relative to its peers and the broader market indices.

Hedging Strategies and Risk Management

Heavy put option activity often reflects a dual purpose: hedging against downside risk and expressing bearish views. Institutional investors and traders may be using these puts to protect profits from recent gains or to speculate on a decline amid macroeconomic uncertainties or sector-specific challenges.

Given ICICI Bank’s sizeable market cap and systemic importance, such hedging is prudent amid fluctuating interest rates, regulatory developments, and competitive pressures in the private banking space.

Liquidity and Trading Viability

ICICI Bank’s stock remains sufficiently liquid for sizeable trades, with a five-day average traded value supporting trade sizes up to ₹52.58 crore based on 2% of average volume. This liquidity ensures that both equity and options traders can enter and exit positions without significant market impact, facilitating active hedging and speculative strategies.

Outlook and Investor Considerations

While ICICI Bank’s recent upgrade from Sell to Hold by MarketsMOJO reflects some improvement in fundamentals or market sentiment, the persistent bearish positioning in the options market warrants caution. Investors should closely monitor price action around the ₹1360 level and expiry dynamics in February.

Given the mixed technical signals and increased put option interest, a cautious approach with appropriate risk management is advisable. Investors may consider hedging strategies or diversifying into alternatives with stronger momentum or valuation metrics, as suggested by analytical tools.

Overall, ICICI Bank remains a key player in the private sector banking space, but current market signals highlight the importance of vigilance amid evolving market conditions.

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