Infosys Ltd Sees Heavy Put Option Activity Ahead of March Expiry

Put Option Activity Highlights

On 6 March 2026, Infosys recorded the most active put options among large-cap software stocks, with 1,825 contracts traded at the ₹1300 strike price expiring on 30 March 2026. This activity generated a turnover of ₹2.276 crores and an open interest of 4,405 contracts, underscoring significant investor interest in downside protection or speculative bearish bets. The underlying stock price stood at ₹1318.4, just 1.4% above the put strike, indicating that traders are positioning for a potential near-term correction or volatility.

Technical and Price Context

Infosys shares closed only 4.09% above their 52-week low of ₹1264.1, reflecting recent weakness in the stock. The price currently trades above its 5-day moving average but remains below the 20-day, 50-day, 100-day, and 200-day moving averages, suggesting a mixed technical picture with short-term support but longer-term resistance. The stock underperformed its sector by 0.4% on the day, gaining 0.96% compared to the sector’s 1.16% rise and the Sensex’s decline of 0.37%.

Investor participation has also waned, with delivery volumes falling by 37.66% against the 5-day average, signalling reduced conviction among buyers. Despite this, Infosys maintains a relatively high dividend yield of 3.53%, which may provide some income support amid price pressures. Liquidity remains robust, with the stock able to handle trade sizes of approximately ₹37.64 crores based on 2% of its 5-day average traded value.

Investor Sentiment and Hedging Strategies

The elevated put option volumes at the ₹1300 strike price suggest that investors are either hedging existing long positions or speculating on a downside move. Given the proximity of the strike to the current market price, these puts offer a relatively cost-effective way to protect against a decline below recent lows. The open interest of 4,405 contracts further indicates that this strike is a focal point for market participants.

Such activity often precedes increased volatility, especially as the expiry date nears. Traders may be anticipating earnings announcements, macroeconomic developments, or sector-specific news that could impact Infosys’s near-term performance. The downgrade in the mojo grade from Buy to Hold on 9 February 2026, with a current mojo score of 51.0, reflects a more cautious outlook from analysts, which may be influencing option market behaviour.

Comparative Market Position

Infosys, with a market capitalisation of ₹5,29,188 crores, remains a heavyweight in the Computers - Software & Consulting sector. Despite recent underperformance relative to its peers, the stock’s liquidity and dividend yield continue to attract institutional interest. However, the shift in mojo grade and the rising put option interest highlight a growing divergence in market sentiment.

Investors should weigh the potential for short-term downside against the company’s long-term fundamentals and sector dynamics. The current technical setup suggests a cautious stance, with the stock needing to reclaim key moving averages to regain bullish momentum.

Expiry Patterns and Market Implications

The 30 March 2026 expiry is attracting significant attention, with the ₹1300 put strike emerging as a key level for hedging and speculative activity. This expiry falls within a critical period for Infosys, as investors digest recent earnings results and guidance updates. The concentration of open interest at this strike price may lead to increased price sensitivity around ₹1300, with potential for pinning or sharp moves depending on market developments.

Market participants should monitor option open interest changes and volume spikes closely, as these can provide early signals of shifts in sentiment or impending volatility. The current put-heavy positioning suggests a tilt towards caution, but also presents opportunities for contrarian investors if the stock stabilises above key support levels.

Conclusion: Balancing Caution with Opportunity

Infosys Ltd’s recent surge in put option activity highlights a nuanced market outlook. While the downgrade to a Hold mojo grade and technical resistance levels suggest caution, the company’s strong market capitalisation, dividend yield, and liquidity underpin its long-term appeal. Investors should carefully analyse option market signals alongside fundamental and technical factors to navigate the evolving landscape.

With the March expiry approaching, the ₹1300 strike price will remain a critical focal point for traders and hedgers alike. Those considering exposure to Infosys should remain vigilant to developments in both the underlying stock and its derivatives market to optimise their positioning.

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