IndusInd Bank Sees Surge in Call Option Activity Amid Bullish Momentum

Robust Price Performance and Market Positioning

On 26 Feb 2026, IndusInd Bank’s share price closed at ₹959.3, marking a 2.46% gain on the day and outperforming the private sector banking sector by 1.45%. This positive momentum extends over the past three trading sessions, during which the stock has delivered a cumulative return of 3.46%. Such consistent gains have propelled the stock above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, underscoring a sustained uptrend.

Despite this upward trajectory, investor participation has shown signs of moderation. Delivery volume on 25 Feb stood at 6.61 lakh shares, representing a sharp decline of 75.44% compared to the five-day average delivery volume. This divergence suggests that while price action remains strong, some investors may be adopting a cautious stance, possibly awaiting further confirmation of the trend.

Heavy Call Option Activity Highlights Bullish Outlook

The derivatives market has mirrored the underlying stock’s optimism, with call options on IndusInd Bank emerging as the most actively traded contracts. The call option with a strike price of ₹950 and expiry on 30 Mar 2026 recorded 2,056 contracts traded, generating a turnover of ₹478.10 lakhs. Open interest for this strike stands at 810 contracts, indicating sustained interest and potential accumulation at this level.

This strike price is particularly significant as it sits just below the current market price, suggesting that traders are positioning for further upside in the near term. The high volume and turnover in these call options reflect a strong conviction among market participants that IndusInd Bank’s share price will continue to appreciate beyond ₹950 by the March expiry.

Mojo Score Upgrade Reflects Improving Fundamentals

IndusInd Bank’s recent upgrade in its Mojo Grade from Sell to Hold on 11 Dec 2025 reflects an improvement in its fundamental and technical outlook. The bank currently holds a Mojo Score of 57.0, indicating a moderate quality rating. While the Market Cap Grade remains at 2, categorising it as a mid-cap stock with a market capitalisation of approximately ₹74,635.49 crores, the upgrade signals a stabilisation in the bank’s performance metrics and investor sentiment.

Such an upgrade often encourages cautious optimism among investors, which is consistent with the observed increase in call option activity. The stock’s liquidity profile also supports active trading, with the ability to handle trade sizes up to ₹7.34 crores based on 2% of the five-day average traded value, ensuring smooth execution for institutional and retail participants alike.

Technical Indicators and Sector Comparison

From a technical perspective, IndusInd Bank’s price action is robust. The stock’s ability to sustain levels above all major moving averages is a positive sign, often interpreted as a bullish indicator by market technicians. Moreover, the stock’s one-day return of 2.20% significantly outpaces the sector’s flat performance and the Sensex’s modest 0.24% gain, highlighting its relative strength within the banking universe.

However, the sharp decline in delivery volume warrants attention. Reduced investor participation could imply that the recent rally is driven more by short-term traders and derivatives players rather than long-term holders. This dynamic may introduce volatility in the near term, especially as the March expiry approaches.

Implications for Investors and Traders

The surge in call option volumes at the ₹950 strike price expiring on 30 Mar 2026 suggests that market participants are positioning for a continuation of the current bullish trend. Traders utilising options strategies may be seeking leveraged exposure to the stock’s upside potential while managing risk through defined expiry dates.

For long-term investors, the recent upgrade to a Hold rating and the stock’s outperformance relative to its sector and benchmark indices may warrant a closer look. However, the moderate Mojo Score and mid-cap status imply that the stock carries a balanced risk-reward profile, necessitating careful portfolio allocation.

Given the falling delivery volumes, investors should monitor upcoming earnings releases, macroeconomic developments, and sectoral trends that could influence the stock’s trajectory. The derivatives market activity provides a useful barometer of sentiment but should be considered alongside fundamental and technical analyses.

Expiry Patterns and Market Sentiment

The choice of the 30 Mar 2026 expiry for the most active call options indicates a medium-term horizon for bullish bets. This expiry aligns with the end of the financial year for many companies, a period often associated with portfolio rebalancing and strategic positioning by institutional investors.

Open interest of 810 contracts at the ₹950 strike price further confirms that traders are not merely speculating intraday but are holding positions with an expectation of meaningful price movement over the coming month. This accumulation of open interest can act as a support level for the stock price, as option writers may hedge their positions accordingly.

Conclusion: A Cautiously Optimistic Outlook

IndusInd Bank Ltd. currently stands at an interesting juncture, with strong price momentum, improving fundamental ratings, and heightened call option activity signalling bullish investor sentiment. While the stock’s technical indicators and relative outperformance are encouraging, the decline in delivery volumes and mid-cap classification suggest that investors should maintain a balanced approach.

Options market data provides valuable insights into market expectations, and the heavy trading in near-the-money call options expiring in March 2026 highlights confidence in further gains. Nonetheless, prudent investors should continue to monitor broader market conditions and sectoral developments to navigate potential volatility.

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