Infosys Ltd Sees Heavy Call Option Activity Ahead of February Expiry

Overview of Market Performance and Stock Metrics

On 18 February 2026, Infosys shares traded at ₹1,361, down 2.86% on the day, underperforming its sector by 0.9% and the broader Sensex by 2.14%. The stock touched an intraday low of ₹1,362.6, marking a 2.06% decline. Notably, Infosys is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating a prevailing bearish technical trend. Investor participation has also waned, with delivery volume on 17 February falling by 12.17% against the five-day average, suggesting reduced conviction among long-term holders.

Despite these headwinds, the stock maintains a high dividend yield of 3.31%, which may continue to attract income-focused investors. Liquidity remains robust, with the stock capable of supporting trade sizes up to ₹69.86 crores based on 2% of the five-day average traded value. Infosys holds a large market capitalisation of ₹5,64,086 crores, underscoring its stature as a heavyweight in the Indian IT sector.

Call Option Activity: Strike Prices and Volumes

The most active call options for Infosys are concentrated around strike prices ranging from ₹1,360 to ₹1,500, all expiring on 24 February 2026. The underlying stock price at ₹1,361 places the ₹1,360 strike call option at-the-money, while strikes at ₹1,440, ₹1,460, ₹1,480, and ₹1,500 are out-of-the-money, reflecting traders’ speculative positioning on potential upside moves.

Among these, the ₹1,500 strike call option recorded the highest open interest of 17,173 contracts, with 8,275 contracts traded on the day, generating a turnover of ₹100.29 lakhs. This suggests a strong interest in bullish bets at this higher strike, despite the current stock price being nearly 10% below this level. The ₹1,440 strike call option saw the largest volume of contracts traded at 9,896, with an open interest of 10,517 and turnover of ₹297.28 lakhs, indicating active positioning closer to the current price.

The ₹1,460 strike call option also attracted significant activity, with 7,844 contracts traded and an open interest of 9,062, while the ₹1,360 strike call option, at-the-money, saw 7,054 contracts traded and an open interest of 4,320. The ₹1,480 strike call option, with 5,961 contracts traded and 4,867 open interest, rounds out the cluster of heavily traded calls.

Interpreting the Bullish Positioning

The concentration of open interest and trading volumes in out-of-the-money call options at strikes above the current market price suggests that traders are positioning for a potential upward move in Infosys shares before expiry. The high open interest at ₹1,500, in particular, implies that market participants are either speculating on a rally or hedging existing positions against upside risk.

However, the stock’s recent technical weakness and declining investor participation temper the bullish outlook. The downgrade in the Mojo Grade from Buy to Hold on 9 February 2026, with a current Mojo Score of 54.0, reflects a more cautious stance by analysts, highlighting the need for investors to weigh fundamentals against near-term market dynamics.

Expiry Patterns and Implications for February 2026

The 24 February 2026 expiry is the focal point for the current surge in call option activity. This expiry date is the last Thursday of the month, a standard expiry cycle for Indian equity options. The clustering of open interest near the ₹1,440 to ₹1,500 strikes suggests that traders are anticipating a potential breakout or volatility spike in the final week before expiry.

Given the stock’s current trading below all major moving averages, a sustained rally to these strike levels would require a significant positive catalyst, such as strong quarterly earnings, favourable sector developments, or broader market momentum. Conversely, the heavy call option interest could also be part of hedging strategies by institutional investors seeking to protect short positions or lock in gains.

Sector and Market Context

Infosys operates within the Computers - Software & Consulting sector, which has experienced mixed performance recently. The sector declined by 1.44% on the day, underperforming the Sensex, which was flat with a marginal 0.03% gain. This divergence highlights sector-specific pressures, including global IT spending concerns and currency fluctuations impacting export revenues.

Infosys’ large-cap status and market cap grade of 1 underscore its importance in the sector and the broader market. However, the downgrade in Mojo Grade from Buy to Hold signals that analysts are reassessing growth prospects amid evolving macroeconomic conditions and competitive pressures.

Investor Takeaways and Outlook

For investors and traders, the heavy call option activity in Infosys ahead of the 24 February expiry offers valuable insights into market expectations. The concentration of open interest at strikes above the current price suggests a cautiously optimistic outlook, with participants positioning for a potential rebound or volatility-driven gains.

However, the technical weakness, declining delivery volumes, and recent downgrade to a Hold rating counsel prudence. Investors should closely monitor upcoming earnings announcements, sector developments, and broader market trends before committing to directional bets.

Given the stock’s high dividend yield and large-cap status, it remains a core holding for many portfolios, but the current environment calls for selective exposure and risk management strategies, especially in derivatives trading.

Summary

Infosys Ltd’s stock price at ₹1,361 is currently under pressure, trading below all key moving averages and showing reduced investor participation. Yet, the surge in call option volumes and open interest at strikes ranging from ₹1,360 to ₹1,500 ahead of the 24 February 2026 expiry indicates a notable bullish positioning by market participants. This dichotomy reflects a market grappling with near-term uncertainty but holding out hope for a positive catalyst to drive the stock higher. Investors should balance these signals with fundamental analysis and sector trends to navigate the evolving landscape effectively.

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