ICICI Bank Sees Surge in Call Option Activity Amid Bullish Market Sentiment

Robust Call Option Activity Highlights Investor Optimism

The most active call options for ICICI Bank Ltd. are concentrated at the ₹1,400 strike price, expiring on 24 February 2026. On this date, a substantial 8,472 contracts were traded, generating a turnover of approximately ₹1016.47 lakhs. Open interest remains elevated at 5,441 contracts, underscoring sustained investor interest in this strike level. The underlying stock price currently stands at ₹1,392.30, just shy of the key strike price, suggesting that market participants are positioning for a potential upward move in the near term.

Price Action Aligns with Sector Momentum

ICICI Bank’s stock performance today has been in line with the broader private sector banking sector, which gained 2.77%. The stock itself opened with a gap up of 4.38% and touched an intraday high of ₹1,417, marking a 4.75% increase. This follows a two-day consecutive gain period, during which the stock has appreciated by 4.02%. The 1-day return of 2.96% outpaced both the sector’s 2.66% and the Sensex’s 2.56% gains, reflecting relative strength in the stock.

Technical indicators show the stock trading above its 5-day, 20-day, 50-day, and 100-day moving averages, although it remains below the 200-day moving average. This mixed technical picture suggests short- to medium-term bullishness tempered by longer-term resistance levels.

Investor Participation and Liquidity Considerations

Despite the positive price momentum, investor participation has shown signs of moderation. Delivery volume on 2 February was 96.53 lakh shares, down by 29.06% compared to the five-day average delivery volume. This decline in delivery volume may indicate cautious profit booking or reduced conviction among some investors. Nevertheless, liquidity remains adequate, with the stock’s traded value supporting trade sizes up to ₹44.1 crore based on 2% of the five-day average traded value, ensuring that institutional and retail investors can transact efficiently.

Mojo Score and Rating Update Reflect Caution

ICICI Bank Ltd. currently holds a Mojo Score of 48.0, with a Mojo Grade of Sell, downgraded from Hold on 1 February 2026. This rating change reflects a more cautious outlook from MarketsMOJO analysts, who have noted concerns despite the recent bullish option activity. The bank’s market capitalisation stands at a substantial ₹9,96,302.58 crore, classifying it as a large-cap stock. However, the Market Cap Grade is rated at 1, indicating limited upside potential relative to its size and valuation metrics.

Expiry Patterns and Strike Price Significance

The expiry date of 24 February 2026 is a focal point for traders, with the ₹1,400 strike price acting as a critical resistance level. The heavy call option volume at this strike suggests that investors are betting on the stock breaching this level within the next three weeks. Should the stock close above ₹1,400 by expiry, these call options would move into the money, potentially resulting in significant gains for option holders.

Open interest data supports this view, as the sizeable number of outstanding contracts indicates that many traders are holding positions rather than closing them out. This sustained interest often precedes notable price movements, as option writers and buyers adjust their hedges accordingly.

Sectoral Context and Comparative Performance

The private sector banking segment has been a strong performer in recent sessions, with ICICI Bank Ltd. among the leaders. The sector’s 2.77% gain today was driven by positive macroeconomic indicators and improving credit growth prospects. ICICI Bank’s outperformance relative to the sector and benchmark indices highlights its continued appeal despite the recent downgrade in analyst sentiment.

However, the falling delivery volumes and the downgrade to a Sell rating suggest that investors should remain vigilant. The stock’s current valuation and technical setup may invite profit-taking or increased volatility in the near term.

Investor Takeaway: Balancing Bullish Sentiment with Caution

ICICI Bank Ltd.’s recent surge in call option activity and strong price gains reflect a bullish sentiment among traders anticipating a breakout above ₹1,400. The stock’s technical positioning above short- and medium-term moving averages supports this view, while the broader private sector banking sector’s positive momentum adds further confidence.

Nonetheless, the downgrade to a Sell rating by MarketsMOJO and the decline in delivery volumes signal that caution is warranted. Investors should monitor the stock’s ability to sustain gains above the 200-day moving average and watch for any shifts in open interest or option volume that could indicate changing market dynamics.

For those considering exposure to ICICI Bank Ltd., it is advisable to weigh the potential upside against the risks of volatility and analyst concerns. Diversifying across other banking stocks or sectors with stronger fundamental grades may provide a more balanced portfolio approach in the current market environment.

Looking Ahead

As the 24 February expiry approaches, option market activity will remain a key barometer of investor expectations. Should ICICI Bank breach the ₹1,400 strike decisively, it could trigger further buying interest and a re-rating of the stock. Conversely, failure to sustain these levels may lead to profit-taking and a reassessment of the bank’s near-term prospects.

Investors and traders alike will be closely watching the interplay between price action, option volumes, and analyst sentiment to navigate this critical period.

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