Infosys Ltd Sees Heavy Put Option Activity Ahead of March Expiry

Put Option Activity Highlights

On 20 March 2026, Infosys emerged as the most active stock in put options trading, with three strike prices drawing substantial volumes. The 1240 strike price led the pack with 3,581 contracts traded, generating a turnover of ₹311.40 lakhs and an open interest of 2,347 contracts. Close behind, the 1160 strike saw 2,968 contracts traded, turnover of ₹57.94 lakhs, and open interest of 1,722. The 1200 strike also attracted significant attention, with 2,953 contracts traded, ₹120.25 lakhs turnover, and an open interest of 3,378 contracts.

This concentrated activity at strikes near and below the current underlying value of ₹1,240 indicates a pronounced bearish stance, with traders positioning for potential downside or seeking protection against further declines.

Expiry Patterns and Market Context

The expiry date of 30 March 2026 is pivotal, with investors evidently adjusting portfolios ahead of this deadline. The clustering of put option trades at strikes ranging from ₹1,160 to ₹1,240 reflects a hedging strategy against a possible correction or volatility spike. Notably, the open interest figures suggest that many of these positions remain open, underscoring sustained bearish sentiment rather than short-term speculative bets.

Infosys’s current price action corroborates this cautious outlook. The stock closed just 2.34% above its 52-week low of ₹1,215.10, underperforming its sector peers marginally despite a 2.27% day gain. It remains below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a persistent downtrend and subdued investor confidence.

Technical and Fundamental Indicators

Further compounding the bearish narrative is the falling investor participation, with delivery volume on 19 March dropping by 17.75% compared to the five-day average, indicating reduced conviction among buyers. However, the stock maintains a relatively high dividend yield of 3.78%, which may provide some support to long-term holders amid volatility.

Liquidity remains robust, with the stock’s traded value comfortably supporting trades up to ₹27.3 crores, ensuring that option market activity is backed by sufficient underlying liquidity.

Mojo Score and Rating Dynamics

Infosys currently holds a Mojo Score of 51.0, categorised as a Hold, reflecting a tempered outlook from the previous Buy rating downgraded on 9 February 2026. This adjustment aligns with the observed option market activity and technical indicators, signalling a more cautious stance among analysts and investors alike.

The company’s large-cap status, with a market capitalisation of ₹4,95,021 crores, ensures it remains a key player in the Computers - Software & Consulting sector, but the recent downgrade highlights the need for investors to carefully weigh risks amid evolving market conditions.

Sector and Benchmark Comparison

On the day of analysis, Infosys outperformed its sector by 0.54% and the Sensex by 1.19%, with respective returns of 1.29% and 1.08%. Despite this relative strength, the stock’s proximity to its 52-week low and the heavy put option volumes suggest that market participants are bracing for potential downside or increased volatility in the near term.

Such divergence between price performance and option market positioning often signals hedging activity by institutional investors or speculative positioning by traders anticipating a correction.

Investor Implications and Outlook

For investors, the pronounced put option activity at strikes near the current price level serves as a cautionary indicator. While the dividend yield and large-cap stature provide some defensive qualities, the technical weakness and bearish option positioning warrant close monitoring.

Traders may consider the put option volumes as a signal to hedge existing long positions or to explore downside protection strategies. Conversely, value investors might view the proximity to the 52-week low and the high dividend yield as an opportunity, provided they are comfortable with the prevailing risks.

Conclusion

Infosys Ltd’s recent surge in put option trading ahead of the 30 March expiry highlights a growing bearish sentiment and hedging activity among market participants. The concentration of trades at strike prices near the current market value, combined with technical weakness and a recent rating downgrade, suggests investors are preparing for potential downside risks.

While the stock’s dividend yield and large-cap credentials offer some stability, the prevailing market signals advise caution. Investors should carefully assess their risk tolerance and consider protective strategies or alternative opportunities within the sector and broader market.

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