Put Option Trading Volume and Strike Price Concentration
Data from recent trading sessions reveals that Infosys Ltd (INFY) has attracted substantial put option volumes, particularly for contracts expiring on 30 December 2025. The strike prices with the most active put contracts include ₹1600, ₹1640, ₹1620, ₹1580, and ₹1660, with the highest number of contracts traded at the ₹1600 strike.
Specifically, the ₹1600 strike price recorded 6,609 contracts traded, generating a turnover of approximately ₹125.31 lakhs and an open interest of 10,234 contracts. This level of open interest suggests a significant build-up of positions at this strike, which is slightly below the current underlying value of ₹1646.4.
Other notable strike prices include ₹1640 with 5,556 contracts traded and a turnover of ₹383.14 lakhs, and ₹1620 with 5,140 contracts traded, turning over ₹184.83 lakhs. The ₹1580 and ₹1660 strikes also saw active trading, with 2,652 and 2,631 contracts respectively, though with comparatively lower turnover figures.
Expiry Date and Market Implications
All the highlighted put options share the same expiry date of 30 December 2025, indicating a concentrated focus on the end-of-year derivatives expiry. This expiry date often attracts heightened activity as traders and investors adjust their positions ahead of the new calendar year.
The clustering of put option activity around strike prices near the current market price of Infosys suggests a cautious stance among investors. Such positioning can be interpreted as a protective measure against potential downside risks or as speculative bets anticipating a price correction.
Underlying Stock Performance and Market Context
Infosys has demonstrated resilience in recent trading sessions, outperforming its sector by 0.51% on the day and registering a 1.06% gain compared to the sector’s 0.53% and Sensex’s 0.57% returns. The stock has recorded gains over the last three consecutive days, delivering a cumulative return of 3.2% during this period.
Technical indicators show that Infosys is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a generally positive trend. Additionally, investor participation has risen, with delivery volumes reaching 37.01 lakh shares on 18 December, marking a 26.22% increase against the five-day average delivery volume.
Liquidity metrics also support active trading, with the stock’s traded value sufficient to accommodate trade sizes of approximately ₹17.69 crore based on 2% of the five-day average traded value.
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Bearish Positioning and Hedging Strategies
The predominance of put options at strike prices slightly below the current market value of Infosys indicates a degree of bearish positioning or hedging by market participants. Investors may be seeking protection against potential declines in the stock price, especially given the proximity of these strikes to the prevailing price level.
Open interest figures reinforce this interpretation, with the ₹1600 strike showing the largest accumulation of outstanding contracts at 10,234. This suggests that a sizeable number of traders are either holding protective puts or speculating on downward price movements before the December expiry.
Other strikes such as ₹1620 and ₹1580 also show elevated open interest levels of 5,822 and 3,136 respectively, further underscoring the focus on downside risk mitigation within this range.
Sector and Market Capitalisation Context
Infosys operates within the Computers - Software & Consulting industry, a sector that has seen varied performance amid evolving technology trends and global economic conditions. With a market capitalisation of approximately ₹6,75,687 crore, Infosys is classified as a large-cap stock, attracting significant institutional and retail investor interest.
The stock’s recent outperformance relative to its sector and the broader Sensex index highlights its continued relevance and investor confidence, despite the cautious tone implied by the put option activity.
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Outlook and Investor Considerations
While Infosys’s recent price action and technical indicators suggest a positive momentum, the concentrated put option activity near the current price level signals that investors are mindful of potential volatility or downside risks in the near term. This duality reflects a market environment where bullish trends coexist with prudent risk management.
Investors and traders should monitor the developments in open interest and volume for these put options as the 30 December expiry approaches, as shifts in these metrics may provide further insight into market sentiment and potential price movements.
Given Infosys’s stature as a large-cap stock with strong liquidity and active participation, options market activity can serve as a valuable barometer for broader investor positioning within the Computers - Software & Consulting sector.
Summary
In summary, Infosys Ltd is currently witnessing significant put option trading concentrated around strike prices close to its prevailing market value, with expiry set for 30 December 2025. This activity points to a cautious or hedging stance among investors despite the stock’s recent gains and technical strength. The interplay between these factors will be critical to watch as the expiry date nears, offering insights into the evolving market outlook for this key large-cap player.
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