Rs 1,100 Puts — 1.2% Below Current Price — Draw 2,451 Contracts on Infosys Ltd

Put Options Event and Cash Market Context

The most active put strikes for Infosys Ltd on 31 Aug 2026 were Rs 1,100 and Rs 1,120, with 2,451 and 2,595 contracts traded respectively. The Rs 1,100 strike sits just 1.2% out-of-the-money (OTM) relative to the underlying price of Rs 1,113.90, while the Rs 1,120 strike is slightly in-the-money (ITM) by about 0.5%. The combined turnover for these strikes exceeded ₹497 crores, indicating significant premium flow into put options ahead of the 29 Sep 2026 expiry.

The stock itself declined 2.20% on the day, underperforming its sector by 1.2%, and opened with a gap down of 2.79%. Intraday lows touched Rs 1,111.90, trading within a narrow range of just 90 paise. Despite this weakness, delivery volumes rose sharply by 39.12% compared to the five-day average, suggesting active participation in the cash market. Is this put activity a reflection of growing caution or a tactical hedge amid a volatile phase?

Strike Price Analysis: Moneyness and Distance

The Rs 1,100 put strike’s proximity to the current price is a key factor in interpreting intent. Being just 1.2% below the underlying, it is close enough to be considered a near-the-money hedge rather than a deep OTM speculative bet. The Rs 1,120 strike, slightly ITM, suggests some put buyers may be positioning for a moderate downside or protecting existing long holdings.

Given the stock’s position above its 50-day moving average but below shorter and longer-term averages (5-day, 20-day, 100-day, and 200-day), these strikes align with a technical support zone. This positioning often corresponds to hedging strategies designed to protect gains or limit losses near key moving average levels rather than outright bearish speculation.

Could the strike distances be signalling a nuanced view that blends protection with selective bearishness?

Interpreting the Put Activity: Hedging, Bearish Positioning, or Put Writing?

Put option activity can be ambiguous. The three primary interpretations are:

• Bearish positioning: Buying ATM or ITM puts on a falling stock to profit from further declines.
• Protective hedging: Buying OTM puts to shield gains in a rising or consolidating stock.
• Put writing (selling): Collecting premium by selling puts, implying confidence that the stock will not fall below the strike.

In this case, the stock’s recent decline of 2.20% and gap down contrasts with the put strikes’ proximity to the current price. The Rs 1,100 strike is OTM but close, while Rs 1,120 is ITM. The open interest (OI) at Rs 1,100 is 5,472 contracts, more than double the 2,584 OI at Rs 1,120, suggesting a heavier build-up at the lower strike.

Moreover, the ratio of contracts traded to OI is approximately 0.45 at Rs 1,100 and 1.0 at Rs 1,120, indicating fresh activity is more pronounced at the ITM strike. This pattern hints at a mix of fresh bearish bets at Rs 1,120 and hedging or position adjustments at Rs 1,100. The sizeable turnover and OI at Rs 1,100 also leave room for put writing, as sellers may be comfortable with the stock holding above this level.

Open Interest and Contracts Analysis

The open interest at Rs 1,100 stands at 5,472 contracts, with 2,451 contracts traded on the day, signalling significant fresh positioning. The Rs 1,120 strike’s OI is lower at 2,584 but saw 2,595 contracts traded, indicating a near-complete turnover of existing positions or new aggressive bets. This disparity suggests that while Rs 1,120 puts are being actively bought or sold, Rs 1,100 puts are accumulating as a more stable position, possibly for hedging or premium collection.

Such a pattern is consistent with a layered strategy where traders hedge near-term downside risk at Rs 1,100 while simultaneously speculating or protecting at Rs 1,120. The relatively high turnover at both strikes, combined with the stock’s recent weakness, points to a complex interplay of protective and directional motives rather than a straightforward bearish consensus.

Cash Market Context: Moving Averages and Delivery Volumes

Infosys Ltd currently trades above its 50-day moving average but below the 5-day, 20-day, 100-day, and 200-day averages. This mixed technical picture suggests short-term weakness amid longer-term consolidation. The Rs 1,100 put strike roughly corresponds to a support zone below the 50-day MA, which aligns with typical hedging levels.

Delivery volumes rose 39.12% on 28 Aug to 61.21 lakh shares, indicating rising investor participation despite the recent price dip. However, the stock’s underperformance relative to its sector and the Sensex (-2.20% vs -1.72% and -0.61% respectively) signals some caution. The combination of rising delivery volumes and put activity suggests investors may be protecting gains or limiting losses rather than outright selling.

Does this technical and volume backdrop favour hedging over bearish conviction?

Conclusion: Protective Hedging with a Hint of Bearish Positioning

The put option activity in Infosys Ltd on 31 Aug 2026 reflects a nuanced market stance. The concentration of contracts at strikes close to the current price, combined with the stock’s recent decline and mixed technical signals, suggests that much of the put buying is likely protective hedging by investors seeking to guard against short-term downside risk.

At the same time, the active turnover and open interest at the ITM Rs 1,120 strike indicate some directional bearish bets or position adjustments. The possibility of put writing at Rs 1,100 cannot be ruled out given the sizeable open interest and turnover, implying some traders are comfortable collecting premium with confidence the stock will hold above this level.

Overall, the data points to a market balancing caution with measured optimism rather than outright bearish conviction. Should investors interpret this as a signal to hedge existing positions or a warning of deeper weakness ahead?

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