ICICI Bank Sees Surge in Call Option Activity Amid Bullish Momentum

Robust Call Option Activity Signals Investor Optimism

The latest data reveals that ICICI Bank’s call options with a strike price of Rs 1,400 and expiry on 27 January 2026 witnessed an impressive 11,567 contracts traded, generating a turnover of approximately Rs 2,131.1 lakhs. Open interest stands at 12,190 contracts, indicating sustained interest and positioning ahead of the expiry date. This level of activity is notable given the underlying stock’s current market price of Rs 1,403.6, suggesting that traders are betting on the stock maintaining or exceeding this level in the coming weeks.

Such concentrated call option volumes often point to a bullish outlook, as investors seek leveraged exposure to potential price gains. The strike price chosen is close to the current market price, which typically reflects expectations of moderate upside or consolidation near this level. The expiry date, less than a month away, adds a time-sensitive dimension to these positions, underscoring confidence in a near-term rally or stability above Rs 1,400.

Stock Performance and Technical Indicators Support Positive Sentiment

ICICI Bank’s stock has outperformed its sector by 2.3% today, registering a 2.26% gain compared to the private sector banking sector’s modest 0.16% rise. Over the past three consecutive trading sessions, the stock has delivered a cumulative return of 4.99%, reflecting sustained buying interest. Intraday, the stock touched a high of Rs 1,406, marking a 2.52% increase from the previous close.

Technically, ICICI Bank is trading above its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a strong upward trend across multiple timeframes. This technical strength likely underpins the bullish positioning seen in the options market, as traders align their strategies with the prevailing momentum.

However, it is worth noting a decline in investor participation, with delivery volume on 5 January falling by 14.49% to 47.85 lakh shares compared to the five-day average. While this dip in delivery volume may suggest some caution among long-term holders, the overall liquidity remains robust, with the stock’s traded value supporting sizeable trade sizes up to Rs 24.74 crore based on 2% of the five-day average traded value.

Mojo Score Upgrade Reflects Improving Fundamentals

ICICI Bank currently holds a Mojo Score of 54.0 with a Mojo Grade of Hold, upgraded from a previous Sell rating on 5 January 2026. This upgrade signals a positive shift in the bank’s fundamental and technical outlook, although the grade suggests cautious optimism rather than a full endorsement for aggressive buying. The bank’s market capitalisation stands at a substantial Rs 9,80,679 crore, categorising it as a large-cap stock with a Market Cap Grade of 1, indicating top-tier market size and liquidity.

Such an upgrade often encourages institutional and retail investors to reassess their positions, potentially contributing to the increased call option activity as traders seek to capitalise on anticipated price appreciation. The combination of improving fundamentals and technical momentum creates a compelling case for bullish strategies, particularly in the options market where leverage can amplify returns.

Expiry Patterns and Strike Price Selection Offer Insight into Market Expectations

The choice of the Rs 1,400 strike price for the most active call options is telling. It is positioned just below the stock’s recent intraday high and current market price, suggesting that traders expect the stock to hold above this level or move higher before the 27 January expiry. This near-the-money strike price is often favoured by traders seeking a balance between risk and reward, as it offers a higher probability of expiring in-the-money compared to out-of-the-money strikes.

Moreover, the expiry date being less than a month away adds urgency to these positions, indicating that traders are anticipating a catalyst or continuation of the current bullish trend within this timeframe. This could be driven by upcoming quarterly results, macroeconomic developments, or sector-specific news that may influence the banking industry.

Sector and Market Context Reinforce ICICI Bank’s Relative Strength

In the broader market context, ICICI Bank’s 1-day return of 2.26% significantly outpaces the private sector banking sector’s 0.16% gain and contrasts with the Sensex’s slight decline of 0.20%. This relative outperformance highlights the bank’s resilience and appeal amid mixed market conditions. Investors often gravitate towards well-established large caps with strong fundamentals during periods of uncertainty, which may explain the heightened interest in ICICI Bank’s options.

While the delivery volume decline suggests some short-term caution, the overall trend remains positive, supported by technical indicators and recent upgrades. The liquidity profile further ensures that investors can enter and exit positions with relative ease, an important consideration for options traders who require efficient execution.

Investor Takeaway: Balancing Opportunity with Caution

For investors and traders, the surge in ICICI Bank’s call option activity presents an opportunity to capitalise on the bank’s bullish momentum. The proximity of the strike price to the current market level and the near-term expiry date suggest that market participants are positioning for a continuation of the recent upward trend. However, the Hold rating and the recent upgrade from Sell indicate that while fundamentals are improving, some caution remains warranted.

Investors should monitor upcoming corporate announcements and macroeconomic indicators that could impact the banking sector. Additionally, the decline in delivery volume signals that some long-term investors may be adopting a wait-and-watch approach, which could temper volatility in the near term.

Overall, ICICI Bank’s strong liquidity, technical strength, and improving fundamentals make it a key stock to watch in the private sector banking space. The active call option market provides a useful barometer of investor sentiment and potential price direction, offering valuable insights for both traders and long-term investors.

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