ICICI Bank Sees Heavy Put Option Activity Amid Bearish Sentiment

Heavy Put Option Trading Highlights Bearish Sentiment

On 9 February 2026, ICICI Bank’s put options with a strike price of ₹1,400 expiring on 24 February 2026 emerged as the most actively traded contracts in the market. A total of 7,127 contracts changed hands, generating a turnover of approximately ₹808.7 lakhs. The open interest for these puts stands at 4,221 contracts, indicating sustained interest from traders betting on or hedging against a potential decline in the stock price.

The underlying stock closed at ₹1,395.3, just below the ₹1,400 strike, suggesting that traders are positioning for a possible downside move or protecting existing long positions. This activity is particularly significant given the stock’s recent performance and technical indicators.

Stock Performance and Technical Context

ICICI Bank’s shares underperformed its sector by 0.62% on the day, declining 0.72% compared to the sector’s marginal fall of 0.11%. The broader Sensex, in contrast, gained 0.58%, highlighting the stock’s relative weakness. Despite this, the stock remains above its 5-day, 20-day, 50-day, and 100-day moving averages, though it continues to trade below the 200-day moving average, a key long-term technical resistance level.

Investor participation has also waned, with delivery volumes on 6 February falling by 36.46% to 70.15 lakh shares compared to the five-day average. This decline in delivery volume suggests reduced conviction among buyers, potentially contributing to the increased demand for protective put options.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹39.6 crore, ensuring that option market activity is backed by sufficient underlying liquidity.

Mojo Score and Analyst Ratings

ICICI Bank currently holds a Mojo Score of 54.0, placing it in the ‘Hold’ category after an upgrade from a previous ‘Sell’ rating on 6 February 2026. This shift reflects a tempered outlook, balancing the bank’s strong fundamentals against near-term headwinds. The bank’s market capitalisation stands at a substantial ₹10,02,789 crore, categorising it as a large-cap stock with a Market Cap Grade of 1, indicating top-tier market capitalisation within its sector.

Despite the upgrade, the modest Mojo Score and the recent increase in put option activity suggest that investors remain cautious, possibly anticipating volatility or sector-specific challenges in the near term.

Expiry Patterns and Investor Positioning

The 24 February 2026 expiry date is attracting significant attention, with put options at the ₹1,400 strike price dominating volumes. This concentration of activity near the current stock price indicates that traders are either hedging existing long positions or speculating on a downside correction. The open interest data corroborates this, showing a sizeable build-up in put contracts, which often precedes increased volatility around expiry dates.

Such positioning is common in banking stocks during periods of macroeconomic uncertainty or ahead of key policy announcements, as investors seek to mitigate risk or capitalise on potential price swings.

Sector and Market Context

Within the private sector banking space, ICICI Bank’s relative underperformance compared to its peers and the broader market has drawn investor scrutiny. The sector itself has been navigating challenges including fluctuating credit demand, regulatory changes, and evolving asset quality concerns. Against this backdrop, the increased put option activity may reflect a broader cautious stance among market participants.

However, the bank’s strong liquidity profile and sizeable market capitalisation provide a degree of resilience, which may limit downside risk in the medium term.

Implications for Investors

The surge in put option activity at a strike price close to the current market level signals that investors are bracing for potential downside or increased volatility in ICICI Bank’s shares over the coming weeks. For long-term investors, this may warrant a review of portfolio risk exposure and consideration of hedging strategies to protect gains.

Traders and short-term investors should monitor open interest trends and price movements closely, especially as the 24 February expiry approaches. A sustained increase in put buying could foreshadow a correction, while a decline in open interest might indicate a waning bearish sentiment.

Given the bank’s ‘Hold’ rating and moderate Mojo Score, a cautious approach is advisable, balancing the stock’s fundamental strengths against technical signals and market sentiment.

Conclusion

ICICI Bank Ltd.’s recent spike in put option trading highlights a growing bearish or hedging stance among investors, centred on the ₹1,400 strike price expiring later this month. While the stock maintains solid technical support levels and a large market capitalisation, the increased put activity and relative underperformance against the sector and Sensex suggest that caution is warranted. Investors should remain vigilant to evolving market dynamics and consider protective measures as the expiry date nears.

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