Infosys Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 20 February 2026, Infosys saw a remarkable volume of put options traded, with the most active strikes clustered between ₹1260 and ₹1360. The highest number of contracts traded was at the ₹1300 strike, with 10,666 contracts exchanging hands, generating a turnover of ₹315.71 lakhs and an open interest of 4,668 contracts. This was closely followed by the ₹1320 strike, which recorded 8,196 contracts traded, turnover of ₹403.57 lakhs, and an open interest of 3,290 contracts.

Other notable strikes included ₹1360 with 5,292 contracts traded and a turnover of ₹651.34 lakhs, ₹1280 with 5,591 contracts and ₹100.86 lakhs turnover, and ₹1260 with 3,833 contracts and ₹46.15 lakhs turnover. The underlying stock price stood at ₹1351.40, placing the bulk of put activity near and slightly below the current market price, indicating a defensive stance by market participants.

Expiry Patterns and Investor Sentiment

The expiry date of 24 February 2026 is attracting concentrated put option interest, suggesting that traders are positioning for potential downside or hedging existing long exposures in the near term. The clustering of open interest and turnover around the ₹1300 to ₹1320 strikes, which are slightly below the current market price, points to a cautious outlook. Investors appear to be seeking protection against a possible correction or volatility in Infosys shares.

This heightened put activity contrasts with the stock’s recent performance, which has underperformed its sector by 0.56% on the day and declined by 1.39%, while the Sensex marginally gained 0.07%. Infosys has been on a three-day losing streak, falling 2.75% cumulatively, and touched an intraday low of ₹1338.20, down 2.36%. The stock is trading below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—further reinforcing the bearish technical backdrop.

Fundamental and Technical Context

Infosys currently holds a MarketsMOJO Mojo Score of 57.0, with a Mojo Grade of Hold, downgraded from Buy on 9 February 2026. The downgrade reflects a tempered outlook amid recent price weakness and technical deterioration. The company’s market capitalisation stands at a robust ₹5,55,328 crores, categorising it firmly as a large-cap stock within the Computers - Software & Consulting sector.

Despite the bearish signals, Infosys offers a relatively attractive dividend yield of 3.37%, which may provide some cushion for long-term investors. However, delivery volumes have fallen sharply by 51.42% compared to the five-day average, indicating reduced investor participation and possibly heightened uncertainty.

Put Option Activity as a Hedge or Bearish Bet

The surge in put option volumes and open interest at strikes below the current market price suggests that market participants are either hedging existing long positions or speculating on a near-term decline. The ₹1300 strike, with the highest open interest, is a critical level to watch. If the stock price falls below this level by expiry, put holders stand to benefit significantly, while sellers of these puts may face losses.

Open interest at the ₹1360 strike, which is slightly above the current price, also indicates some protective positioning against a moderate pullback. The combined turnover of over ₹1,500 lakhs across these strikes highlights the substantial capital flow into downside protection instruments.

Sector and Market Comparison

Infosys’s underperformance relative to its sector and the broader Sensex index adds weight to the bearish sentiment reflected in options trading. The sector itself has been relatively resilient, but Infosys’s technical weakness and falling investor participation may signal company-specific concerns or profit-taking by institutional investors.

Given the stock’s liquidity, with a trade size capacity of approximately ₹69.71 crores based on 2% of the five-day average traded value, the options market activity is a reliable indicator of investor sentiment rather than illiquid speculative trades.

Investor Takeaway

For investors and traders, the heavy put option activity in Infosys ahead of the 24 February expiry is a clear signal to monitor downside risks closely. The stock’s technical weakness, combined with reduced delivery volumes and a recent downgrade to Hold, suggests caution. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels.

Conversely, value investors might view the current price weakness and attractive dividend yield as an opportunity, provided the broader market and sector conditions remain stable. However, the options market data underscores the importance of vigilance in the near term, as market participants appear to be bracing for potential volatility or a correction.

Overall, the interplay of technical, fundamental, and options market signals paints a nuanced picture of Infosys’s near-term outlook, favouring a cautious stance while keeping an eye on key support levels around ₹1300.

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