Infosys Sees Significant Put Option Activity Ahead of December Expiry

Put Option Activity Highlights

On the derivatives front, Infosys Ltd (INFY) recorded a substantial volume of put options traded for the expiry dated 30 December 2025. Specifically, 3,072 contracts were exchanged at the 1560 strike price, generating a turnover of approximately ₹364.83 lakhs. Open interest for these contracts stands at 2,328, indicating a significant build-up of positions that could influence price movements as expiry approaches.

The underlying stock price at the time of this activity was ₹1,568.30, placing the 1560 strike price slightly below the current market value. This positioning suggests that market participants may be seeking downside protection or speculating on a potential price correction in the near term.

Stock Performance and Market Context

Infosys has demonstrated resilience in recent trading sessions, outperforming its sector by 0.26% on the day of analysis. The stock has recorded gains over the last two consecutive days, accumulating a return of 0.51% during this period. Notably, Infosys is trading above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, which typically signals a sustained positive trend.

However, investor participation appears to be moderating, with delivery volumes on 1 December registering at 32.05 lakh shares, reflecting a decline of 44.52% compared to the five-day average delivery volume. This reduction in delivery volume may indicate a cautious approach by long-term investors or a shift towards shorter-term trading strategies.

Liquidity metrics suggest that Infosys remains sufficiently liquid for sizeable trades, with the stock supporting a trade size of approximately ₹21.61 crore based on 2% of the five-day average traded value. This liquidity is a critical factor for institutional investors and traders engaging in options strategies.

Implications of Put Option Concentration

The concentration of put options at the 1560 strike price, close to the current market level, often reflects a hedging mechanism by investors seeking to protect gains or limit downside risk. Alternatively, it may indicate speculative bets on a potential price decline before the expiry date. The open interest figure of 2,328 contracts underscores the significance of this strike price as a key level to watch in the coming weeks.

Put options provide the right to sell shares at the strike price, and elevated activity in these contracts can sometimes precede increased volatility or price adjustments. Traders and portfolio managers may be positioning themselves to mitigate risks amid broader market uncertainties or sector-specific developments within the Computers - Software & Consulting industry.

Sector and Market Capitalisation Context

Infosys operates within the Computers - Software & Consulting sector, a segment that has shown mixed performance in recent sessions. The stock’s market capitalisation stands at ₹6,53,522 crore, categorising it firmly as a large-cap entity. This scale often attracts diverse investor profiles, from retail participants to large institutional funds, all of whom may utilise options for various strategic purposes.

Comparatively, the Sensex recorded a decline of 0.37% on the day, while the sector index remained flat. Infosys’s slight outperformance relative to these benchmarks highlights its relative strength, even as some investors adopt protective stances through options.

Expiry Patterns and Market Sentiment

The approaching expiry date of 30 December 2025 is a critical juncture for the options market in Infosys. Expiry periods often bring heightened activity as traders adjust or close positions, and the current put option volume suggests a focus on downside risk management. The strike price of 1560, being near the spot price, may act as a psychological support level, with traders closely monitoring price action around this mark.

Market participants may also be balancing their portfolios by employing puts as insurance against potential adverse movements, especially given the broader market’s cautious tone. The interplay between open interest and traded volumes in these options will be key to understanding future price dynamics.

Investor Takeaways

For investors in Infosys, the observed put option activity offers insights into prevailing market sentiment and risk considerations. While the stock’s recent performance and technical indicators suggest a positive trend, the options data reveals a layer of caution among traders. This duality underscores the importance of monitoring both price action and derivatives market signals when making investment decisions.

Given the stock’s liquidity and large-cap status, options strategies remain a viable tool for portfolio management, whether for hedging or speculative purposes. The concentration of put options at a strike price close to the current market value highlights a key level that may influence near-term price movements.

Conclusion

Infosys’s derivatives market activity ahead of the December expiry reflects a nuanced market outlook. The significant put option volume at the 1560 strike price points to a blend of hedging and bearish positioning, set against a backdrop of steady stock performance and sector stability. Investors and traders should continue to monitor these developments closely, as expiry approaches and market conditions evolve.

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