Infosys Ltd Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On the expiry date of 24 February 2026, Infosys put options have seen robust volumes across several strike prices, notably at ₹1,340, ₹1,360, ₹1,320, and ₹1,300. The most active strike was ₹1,340, with 6,215 contracts traded, generating a turnover of ₹3.26 crores and an open interest of 4,056 contracts. Close behind was the ₹1,300 strike, which recorded 5,629 contracts traded and an open interest of 4,077, with turnover of ₹71.6 lakhs. The ₹1,320 strike saw 4,819 contracts traded and an open interest of 2,905, while the ₹1,360 strike had 3,066 contracts traded and an open interest of 2,520.

The underlying stock price at the time stood at ₹1,335.8, placing the ₹1,340 and ₹1,360 strikes slightly out-of-the-money, while the ₹1,320 and ₹1,300 strikes were in-the-money or near-the-money. This distribution of put option activity suggests a strategic hedging approach by investors anticipating potential downside risks in the near term.

Technical and Market Context

Infosys has been under pressure recently, closing 4.47% above its 52-week low of ₹1,281.5. The stock has declined for four consecutive sessions, losing 3.58% over this period, and underperformed its sector by 0.72% on the latest trading day. It is currently trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – indicating a bearish technical setup.

Investor participation has also waned, with delivery volumes on 20 February falling by 43.87% compared to the five-day average, signalling reduced conviction among buyers. Despite this, Infosys continues to offer a relatively attractive dividend yield of 3.41%, which may provide some support to the stock price in the medium term.

Mojo Score and Analyst Ratings

Infosys currently holds a Mojo Score of 57.0, categorised as a Hold, reflecting a cautious stance among analysts. This represents a downgrade from a previous Buy rating on 9 February 2026, indicating a reassessment of the company’s near-term prospects. The market capitalisation remains substantial at ₹5,48,496 crores, affirming its large-cap status within the Computers - Software & Consulting sector.

Implications of Put Option Concentration

The concentration of put option volumes at strikes near and slightly above the current market price suggests that investors are positioning for a potential decline or are seeking protection against further downside. The open interest figures, particularly at ₹1,300 and ₹1,340 strikes, indicate that these levels are focal points for hedging strategies.

Such activity often precedes increased volatility, as market participants adjust their portfolios in response to evolving risk perceptions. The expiry date being imminent adds to the urgency of these trades, as investors look to manage exposure ahead of potential market-moving events or earnings announcements.

Sector and Broader Market Comparison

Infosys’s underperformance contrasts with the broader Sensex, which posted a positive return of 0.64% on the same day, while the Computers - Software & Consulting sector declined by 0.57%. This relative weakness highlights company-specific concerns or profit-taking pressures that may be driving the bearish sentiment.

Liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹50.91 crores, ensuring that option and equity market participants can execute sizeable transactions without significant price impact.

Investor Takeaway

For investors, the heavy put option activity in Infosys signals caution. While the company’s fundamentals remain solid, the technical indicators and market sentiment suggest near-term headwinds. The downgrade from Buy to Hold by analysts further underscores the need for prudence.

Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the current option activity as confirmation of potential declines, presenting opportunities to capitalise on volatility.

It is also important to monitor upcoming corporate announcements, sector developments, and broader market trends that could influence Infosys’s trajectory beyond the immediate expiry horizon.

Conclusion

Infosys Ltd’s surge in put option volumes ahead of the 24 February 2026 expiry reflects a growing bearish sentiment and hedging demand among market participants. The stock’s technical weakness, coupled with a recent downgrade and underperformance relative to its sector and the Sensex, has prompted investors to seek downside protection at key strike prices ranging from ₹1,300 to ₹1,360.

While the company’s large-cap status and dividend yield provide some support, the current market dynamics warrant a cautious approach. Investors should closely watch option market trends and technical signals to navigate the evolving risk landscape effectively.

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