Infosys Ltd Sees Heavy Call Option Activity Amid Price Weakness and Bearish Sentiment

Recent Price Performance and Market Context

Infosys Ltd, a leading player in the Computers - Software & Consulting sector, has been under pressure in recent sessions. The stock has declined by 13.17% over the last three trading days, culminating in a sharp 6.41% drop on 13 February 2026. It opened with a gap down of 6.65% and touched an intraday low of ₹1,281.5, marking a new 52-week low. This performance notably underperformed the IT - Software sector, which itself fell by 4.41%, and the broader Sensex index, down 0.98% on the same day.

Technical indicators reinforce the bearish trend, with Infosys trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. Despite this, investor participation has risen sharply, with delivery volumes on 12 February reaching 1.51 crore shares, a 155.52% increase over the five-day average. The stock remains liquid, supporting sizeable trade volumes with a 2% average traded value equating to approximately ₹39.35 crore.

Call Option Activity: Strike Prices and Expiry Patterns

Options data for Infosys reveals intense activity in call options expiring on 24 February 2026. The most actively traded strike prices range from ₹1,340 to ₹1,440, all above the current underlying value of ₹1,308. This indicates a predominantly bullish positioning among option traders, anticipating a potential price recovery within the next two weeks.

The strike price of ₹1,420 saw the highest number of contracts traded at 7,940, generating a turnover of ₹259.48 lakhs and an open interest of 4,845 contracts. Close behind, the ₹1,440 strike recorded 6,949 contracts traded with a turnover of ₹172.06 lakhs and a notably high open interest of 5,694 contracts, suggesting strong investor interest in this upper range.

Other significant strikes include ₹1,360 with 7,978 contracts traded and ₹685.15 lakhs turnover, and ₹1,340 with 6,588 contracts traded and a turnover of ₹761.05 lakhs. The ₹1,380 strike also attracted 6,364 contracts, generating ₹376.24 lakhs in turnover. Open interest figures across these strikes indicate sustained positions, with the ₹1,440 and ₹1,420 strikes particularly standing out for their elevated open interest levels.

Investor Sentiment and Market Positioning

The heavy call option volumes at strikes above the current market price suggest that investors are positioning for a rebound or hedging against further downside. The elevated open interest at ₹1,440 and ₹1,420 strikes indicates that traders expect the stock to test these levels by expiry or are using these strikes as reference points for their strategies.

However, the recent downgrade in the Mojo Grade from Buy to Hold on 9 February 2026, with a current Mojo Score of 60.0, reflects a cautious stance from analysts. The downgrade was likely influenced by the stock’s underperformance and technical weakness. The Market Cap Grade remains at 1, underscoring Infosys’s status as a large-cap stock with significant market presence but limited near-term upside according to current assessments.

Dividend yield remains attractive at 3.32%, which may provide some support to long-term investors amid volatility. Yet, the stock’s underperformance relative to its sector and the broader market signals challenges ahead, particularly as the IT sector itself is experiencing a downturn.

Comparative Sector and Market Analysis

Infosys’s recent price action contrasts with the broader IT - Software sector, which declined by 4.41% on the day. The stock’s sharper fall of over 6% indicates company-specific pressures or profit-taking. The Sensex’s modest decline of 0.98% suggests that the weakness is concentrated in technology and software stocks, possibly due to sector rotation or macroeconomic concerns affecting IT spending.

Given the sector’s current weakness, the bullish call option activity may reflect speculative positioning or hedging strategies rather than broad-based optimism. Investors should weigh these factors carefully, considering both the technical signals and fundamental outlook.

Outlook and Strategic Considerations for Investors

With Infosys trading below all major moving averages and hitting new lows, the near-term technical outlook remains bearish. The heavy call option activity, particularly at strikes well above the current price, may indicate speculative bets on a recovery or hedging by institutional investors. However, the downgrade to a Hold rating and the stock’s underperformance relative to its sector counsel caution.

Investors should monitor the stock’s price action closely in the coming days, especially as the 24 February expiry approaches. A sustained move above the ₹1,360 to ₹1,440 range could validate the bullish option positioning, while failure to hold support near current levels may lead to further downside.

Given the stock’s large market capitalisation of ₹5,62,464 crore and its liquidity profile, it remains a key bellwether for the IT sector. However, the current environment suggests that selective exposure and risk management are prudent, particularly in light of sector-wide weakness and macroeconomic uncertainties.

Summary

Infosys Ltd’s recent sharp decline and new 52-week lows contrast with robust call option activity at strikes above the current price, signalling mixed market sentiment. While option traders appear to position for a rebound, fundamental and technical indicators remain cautious. The downgrade to Hold and underperformance relative to peers highlight the need for careful analysis before committing fresh capital. Investors should watch for price stabilisation and sector trends ahead of the February expiry to gauge the stock’s next directional move.

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