Union Bank of India Sees Surge in Put Option Activity Amid Mixed Market Signals

Robust Price Performance Contrasted by Elevated Put Option Interest

Union Bank of India (NSE: UNIONBANK) has demonstrated strong price action in recent sessions, touching an intraday high of Rs 180 on 14 Jan 2026, marking a fresh 52-week peak. The stock has outperformed its public sector banking peers by 5.77% today and has recorded a consecutive four-day gain, delivering a cumulative return of 10.27% over this period. This rally is supported by rising investor participation, with delivery volumes on 13 Jan reaching 67.4 lakh shares, a 7.48% increase over the five-day average.

Technically, the stock is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained uptrend. Liquidity remains ample, with the stock capable of handling trade sizes up to Rs 4.56 crore based on 2% of the five-day average traded value.

Put Option Activity Highlights Bearish Hedging and Speculation

Contrasting the bullish price momentum, the options market reveals a surge in put option activity for Union Bank of India. The most active put option contract is at the Rs 170 strike price, expiring on 27 Jan 2026. On this expiry date, a total of 9,227 contracts were traded, generating a turnover of approximately Rs 988.07 lakh. Open interest stands at 2,125 contracts, indicating substantial outstanding positions that could influence price dynamics as expiry approaches.

The underlying stock price at Rs 178.02 is currently above the Rs 170 strike, suggesting that many traders are either hedging existing long positions or speculating on a potential near-term correction. The weighted average price of traded options skewing closer to the lower price range further supports the notion of cautious positioning among market participants.

Market Sentiment and Strategic Implications

The coexistence of strong price gains and heavy put option volumes points to a nuanced market outlook. Institutional investors and traders may be employing put options as a protective hedge against possible volatility or profit-taking after the recent rally. Alternatively, some participants could be positioning for a pullback, anticipating that the stock’s rapid ascent may face resistance near current levels.

Union Bank’s current MarketsMOJO score stands at 64.0, with a Mojo Grade of Hold, reflecting a tempered outlook compared to its previous Buy rating downgraded on 28 Oct 2025. The market cap grade remains at 1, underscoring its status as a large-cap stock with significant institutional interest. This rating adjustment aligns with the mixed signals from price action and options activity, suggesting investors should exercise caution and monitor developments closely.

Expiry Patterns and Potential Price Impact

The 27 Jan 2026 expiry date is critical for Union Bank’s options market. The concentration of put contracts at the Rs 170 strike price suggests a key support level that traders are watching closely. Should the stock price dip below this level, it could trigger increased put option exercise or unwinding, potentially accelerating downward pressure.

Conversely, if the stock maintains its current trajectory above Rs 178, many put options may expire worthless, benefiting holders of long positions and possibly encouraging further upside momentum. The interplay between spot price movements and options expiry dynamics will be pivotal in shaping near-term trading strategies.

Sector and Benchmark Comparison

Union Bank’s 7.20% one-day return on 14 Jan 2026 significantly outpaced the public sector bank sector’s 1.46% gain and the broader Sensex’s marginal decline of 0.23%. This relative strength underscores the bank’s current market leadership within its sector. However, the elevated put option interest contrasts with this outperformance, signalling that some investors remain wary of potential volatility or a correction.

Given the bank’s large-cap status with a market capitalisation of Rs 1,26,374 crore, its price movements and options activity are closely monitored by institutional investors and market makers. The mixed signals warrant a balanced approach, combining appreciation of the stock’s recent gains with prudent risk management.

Investor Takeaways and Outlook

Investors should weigh the strong technical and fundamental backdrop of Union Bank of India against the cautionary signals emanating from the options market. The heavy put option volume at the Rs 170 strike price expiry on 27 Jan 2026 suggests that market participants are hedging against downside risk or speculating on a near-term correction.

Given the stock’s recent outperformance and the MarketsMOJO Hold rating, a prudent strategy may involve monitoring price action around key support levels while considering protective options strategies to mitigate risk. The evolving open interest and turnover in put options will be important indicators to track as expiry approaches.

Overall, Union Bank of India remains a significant player within the public sector banking space, but the current market signals advise a balanced approach combining optimism with vigilance.

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