Infosys Ltd Sees Heavy Call Option Activity Amid Bearish Price Momentum

Recent Price Performance and Market Context

Infosys, currently trading at ₹1,279.8, has been on a downward trajectory, losing 7.77% over the past five consecutive sessions. The stock opened sharply lower by 2% on 24 Feb 2026 and touched an intraday low of ₹1,281, marking its lowest level in a year. This decline outpaced the IT - Software sector’s fall of 3.12% and the broader Sensex’s modest 0.89% drop, signalling sector-specific pressures. Additionally, the stock is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a bearish technical setup.

Investor participation has also waned, with delivery volumes falling 6.64% against the five-day average, suggesting cautious sentiment. Despite this, Infosys maintains a relatively high dividend yield of 3.47%, which may provide some defensive appeal to income-focused investors. The company’s large market capitalisation of ₹5,38,643 crores and liquidity supporting trade sizes up to ₹49.71 crores confirm its status as a highly tradable stock.

Call Option Activity Highlights Bullish Positioning

Contrary to the recent price weakness, call option data reveals a strong bullish undertone among derivatives traders. The most active call options for Infosys are concentrated around strike prices ranging from ₹1,320 to ₹1,500, with expiry dates primarily on 24 Feb 2026 and 30 Mar 2026.

The highest number of contracts traded was at the ₹1,400 strike expiring on 24 Feb 2026, with 3,799 contracts and an open interest of 7,787. This indicates substantial interest in calls slightly above the current spot price, suggesting traders anticipate a near-term recovery. Similarly, the ₹1,320 and ₹1,340 strikes for the same expiry saw 3,720 and 3,162 contracts traded respectively, with open interest levels of 1,578 and 1,864.

For the longer-dated expiry on 30 Mar 2026, the ₹1,360 strike recorded 3,181 contracts traded with an open interest of 3,129, while the ₹1,500 strike saw 2,993 contracts traded and a notably high open interest of 9,088. The turnover for the ₹1,360 strike was particularly significant at ₹361.74 lakhs, reflecting strong investor conviction in a price rebound beyond this level over the next month.

These strike prices are positioned above the current market price, indicating a bullish stance among option buyers who expect Infosys to appreciate by expiry. The concentration of open interest at these levels also suggests potential resistance zones where traders may look to exercise or close positions depending on price action.

Mojo Score and Analyst Ratings Reflect Cautious Outlook

Infosys currently holds a Mojo Score of 57.0, placing it in the 'Hold' category, a downgrade from its previous 'Buy' rating as of 9 Feb 2026. This shift reflects a more cautious stance amid recent price weakness and sector headwinds. The company’s Market Cap Grade remains at 1, indicating its large-cap status but signalling limited upside from a market capitalisation perspective.

Analysts note that while Infosys’s fundamentals remain solid, the near-term technical weakness and subdued investor participation warrant a wait-and-watch approach. The high dividend yield and strong liquidity provide some comfort, but the stock’s underperformance relative to its sector and the broader market tempers enthusiasm.

Expiry Patterns and Implications for Traders

The clustering of call option activity around the 24 Feb 2026 expiry suggests that traders are positioning for a potential short-term rebound or volatility event. The significant open interest at strikes above the current price indicates expectations of a recovery beyond ₹1,320 to ₹1,400 levels within days. Meanwhile, the 30 Mar 2026 expiry contracts, especially at the ₹1,360 and ₹1,500 strikes, point to a more medium-term bullish outlook, with investors willing to pay a premium for upside exposure over the next month.

Such patterns often precede key corporate announcements, quarterly results, or sectoral developments that could catalyse price movements. Given Infosys’s recent underperformance and technical weakness, these call options may serve as leveraged bets on a turnaround or as hedges against short positions.

Investor Takeaway: Balancing Bearish Trends with Bullish Option Sentiment

Infosys’s recent price action paints a challenging picture, with the stock underperforming its sector and breaching key support levels. However, the heavy call option activity at strikes above the current price and sizeable open interest suggest that market participants are hedging bets on a recovery or volatility-driven upside.

For investors, this dichotomy highlights the importance of monitoring both spot price trends and derivatives market signals. While the technical indicators and Mojo Grade advise caution, the options market reveals pockets of optimism that could materialise if sector conditions improve or company-specific catalysts emerge.

Given the stock’s liquidity and dividend yield, long-term investors may consider accumulating on dips, while traders could explore call options at strikes near ₹1,360 to ₹1,400 to capitalise on potential rebounds. Close attention to expiry dates and open interest shifts will be crucial in gauging evolving market sentiment.

Sector and Market Outlook

The IT - Software sector has faced headwinds recently, with a 3.12% decline on 24 Feb 2026 reflecting broader concerns over global demand and margin pressures. Infosys, as a bellwether stock, often mirrors these trends but also leads on recovery prospects given its scale and diversified client base.

Investors should watch for upcoming quarterly results and macroeconomic developments that could influence sector momentum. A sustained rebound in Infosys’s share price would likely require improved earnings visibility and stabilisation of global IT spending.

Conclusion

Infosys Ltd’s stock currently navigates a complex landscape of bearish price action and bullish derivatives positioning. The heavy call option volumes and open interest at strikes above the current market price indicate that traders are anticipating a potential turnaround despite recent weakness. While the Mojo Score downgrade to 'Hold' and technical indicators counsel caution, the company’s strong fundamentals, dividend yield, and liquidity provide a foundation for recovery.

Investors and traders alike should closely monitor option expiry patterns, open interest dynamics, and sector developments to make informed decisions. The interplay between spot and derivatives markets offers valuable insights into market expectations and risk appetite for this large-cap IT heavyweight.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →