ICICI Bank Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

The most active put options for ICICI Bank are concentrated at the ₹1,350 strike price with expiry set for 24 February 2026. On this date, a substantial 2,754 contracts were traded, generating a turnover of ₹11.12 crores. Open interest currently stands at 3,041 contracts, indicating sustained interest in downside protection or speculative bearish bets.

The underlying stock price at the time of this activity was ₹1,392.30, placing the ₹1,350 strike roughly 3.1% below the current market price. This proximity suggests that traders are positioning for a potential near-term correction or are hedging existing long positions against moderate downside risk.

Stock Performance and Market Context

ICICI Bank’s stock has been on a positive trajectory, gaining 4.02% over the last two trading sessions. On 3 February 2026, the stock opened with a gap-up of 4.38%, reaching an intraday high of ₹1,417, a 4.75% increase from the previous close. This outperformance aligns with the broader private sector banking sector, which gained 2.77% on the same day, and outpaced the Sensex’s 2.56% rise.

Technically, the stock trades above its 5-day, 20-day, 50-day, and 100-day moving averages, signalling short- to medium-term strength. However, it remains below the 200-day moving average, indicating that longer-term momentum has yet to fully confirm a sustained uptrend.

Despite the recent gains, delivery volumes have declined by 29.06% compared to the five-day average, with 96.53 lakh shares delivered on 2 February 2026. This drop in investor participation could reflect profit-booking or cautious positioning ahead of upcoming market events.

Investor Sentiment and Hedging Implications

The surge in put option activity at the ₹1,350 strike price, combined with the stock’s recent gains, suggests a nuanced market outlook. While the stock has shown resilience and upward momentum, investors appear to be hedging against potential volatility or a pullback in the near term. This is a common strategy in banking stocks, which can be sensitive to macroeconomic factors such as interest rate changes, credit growth, and regulatory developments.

ICICI Bank’s Mojo Score currently stands at 48.0, with a Mojo Grade of Sell, downgraded from Hold on 1 February 2026. This downgrade reflects a cautious stance based on the company’s recent performance metrics and market conditions. The bank’s market capitalisation is substantial at ₹9,96,302.58 crores, categorising it firmly as a large-cap stock, but the Market Cap Grade is rated at 1, indicating limited upside potential relative to its size.

Options Expiry and Strike Price Patterns

The expiry date of 24 February 2026 is significant as it falls within the monthly options expiry cycle, a period often marked by heightened volatility and strategic positioning by institutional investors. The concentration of put contracts at ₹1,350 indicates that this level is viewed as a critical support zone by market participants. Should the stock price approach or breach this strike, it could trigger further downside pressure or prompt option writers to adjust their hedges.

Open interest data corroborates this view, with 3,041 contracts outstanding at this strike, signalling that many traders are either holding protective puts or speculating on a decline. The turnover of ₹11.12 crores in put options alone underscores the liquidity and active interest in downside protection for ICICI Bank.

Comparative Sector and Market Analysis

Within the private sector banking space, ICICI Bank’s recent performance is broadly in line with peers, though its put option activity is notably higher. This divergence may reflect specific concerns about the bank’s near-term outlook or a strategic hedging approach by large investors. The sector’s 2.77% gain on the day contrasts with the bank’s 2.96% one-day return, highlighting its relative strength despite the cautious options positioning.

Liquidity metrics also support active trading, with the stock’s daily traded value sufficient to accommodate sizeable trades up to ₹44.1 crores without significant market impact. This liquidity is essential for options traders who require efficient execution to manage risk effectively.

Outlook and Investor Considerations

Investors should weigh the mixed signals from ICICI Bank’s recent price strength against the elevated put option activity. The downgrade to a Sell grade by MarketsMOJO suggests that caution is warranted, especially given the stock’s position below its 200-day moving average and the decline in delivery volumes.

For those holding long positions, the active put options at ₹1,350 provide a natural hedge against downside risk in the near term. Conversely, traders with a bearish outlook may view these puts as an opportunity to capitalise on potential volatility around the February expiry.

Given the bank’s large market capitalisation and liquidity, ICICI Bank remains a key stock to monitor within the private banking sector. Its performance will likely be influenced by broader macroeconomic trends, regulatory developments, and sectoral credit growth dynamics over the coming weeks.

Conclusion

The surge in put option trading for ICICI Bank Ltd. at the ₹1,350 strike price ahead of the 24 February 2026 expiry highlights a cautious market stance despite recent gains. This activity reflects a blend of hedging and speculative bearish positioning, underscoring the importance of monitoring options market data alongside price action for a comprehensive view of investor sentiment. With a recent downgrade to Sell and mixed technical signals, investors should approach ICICI Bank with measured prudence, balancing potential upside against downside risks in a volatile banking sector environment.

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