Infosys Sees Heavy Put Option Activity Ahead of February Expiry

Put Option Activity Highlights

Data from the options market reveals that Infosys put options expiring on 24 February 2026 have attracted substantial volumes and open interest, particularly at strike prices close to the current underlying value of ₹1,536.30. The most actively traded put contracts include:

• Strike ₹1,500: 5,392 contracts traded, turnover of ₹511.81 lakhs, open interest at 5,090 contracts
• Strike ₹1,540: 3,019 contracts traded, turnover of ₹464.32 lakhs, open interest at 4,316 contracts
• Strike ₹1,520: 3,014 contracts traded, turnover of ₹366.26 lakhs, open interest at 2,765 contracts
• Strike ₹1,460: 3,578 contracts traded, turnover of ₹195.07 lakhs, open interest at 2,128 contracts
• Strike ₹1,400: 3,607 contracts traded, turnover of ₹98.98 lakhs, open interest at 6,651 contracts

The concentration of open interest at the ₹1,400 and ₹1,500 strikes is particularly noteworthy, with the ₹1,400 strike showing the highest open interest of 6,651 contracts. This suggests that market participants are positioning for potential downside protection or anticipating a correction below the current market price.

Market Context and Stock Performance

Infosys has outperformed its sector by 0.31% on the day, registering a modest 0.16% gain compared to the sector’s 0.22% decline and the broader Sensex’s 0.47% fall. Despite this relative strength, the stock is trading below its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating some underlying technical weakness.

Investor participation has risen sharply, with delivery volume on 4 February reaching 1.65 crore shares, a 246.03% increase over the five-day average. This heightened activity may be contributing to the increased options market interest, as traders seek to hedge or speculate on near-term price movements.

Infosys currently offers a dividend yield of approximately 3%, which remains attractive for income-focused investors amid market volatility. The stock’s liquidity is robust, with an average traded value sufficient to support trade sizes of nearly ₹40 crore, facilitating active options and cash market participation.

Investor Sentiment and Hedging Implications

The heavy put option volumes and open interest at strikes below and near the current market price indicate a cautious or bearish stance among traders. Such activity often reflects hedging strategies by institutional investors seeking to protect gains or limit downside risk amid uncertain market conditions.

Given Infosys’s large market capitalisation of ₹6,22,758 crore and its status as a blue-chip stock in the software and consulting sector, these put positions may also be part of broader portfolio risk management. The put strikes clustered between ₹1,400 and ₹1,540 suggest that investors are bracing for potential volatility or a pullback in the near term.

It is also possible that some traders are speculating on a decline, given the stock’s current trading below all major moving averages despite recent outperformance. The divergence between price action and option market positioning warrants close monitoring as the February expiry date approaches.

Technical and Fundamental Overview

From a technical perspective, Infosys’s failure to sustain levels above its moving averages signals resistance and potential downward pressure. The increased put option interest aligns with this technical outlook, reinforcing the possibility of a correction or consolidation phase.

Fundamentally, Infosys maintains a strong mojo score of 70.0 with a recent upgrade from Hold to Buy on 22 December 2025, reflecting improved confidence in its earnings prospects and business model. The market cap grade of 1 underscores its large-cap status and liquidity, making it a preferred choice for institutional investors.

Nevertheless, the options market activity suggests that despite positive fundamentals, market participants are preparing for near-term risks, possibly due to macroeconomic uncertainties or sector-specific challenges.

Expiry Patterns and Market Outlook

The 24 February 2026 expiry is shaping up as a critical juncture for Infosys options traders. The clustering of put open interest at multiple strikes suggests a wide range of hedging and speculative positions. Market participants will be watching price action closely in the coming weeks to gauge whether the stock can hold above key support levels or if further downside is imminent.

Given the stock’s current underlying value of ₹1,536.30, the put strikes at ₹1,540 and ₹1,520 are effectively at-the-money or slightly out-of-the-money, indicating significant interest in downside protection just below current prices. The substantial open interest at ₹1,400 strike, which is considerably out-of-the-money, may reflect more aggressive bearish bets or longer-term hedges.

Investors should consider these option market signals alongside fundamental and technical analysis to better understand the risk-reward profile of Infosys in the near term.

Conclusion

Infosys Ltd’s options market activity ahead of the February expiry reveals a pronounced tilt towards put options, signalling cautious sentiment among traders. Despite the stock’s recent outperformance relative to its sector and a positive mojo grade upgrade, the concentration of put open interest at strikes below and near the current price suggests that investors are hedging against potential downside or positioning for a correction.

With the stock trading below all major moving averages and rising delivery volumes, the technical backdrop supports the cautious stance reflected in the options market. Market participants should monitor developments closely as the expiry date approaches, balancing Infosys’s strong fundamentals against the evident near-term risks implied by option positioning.

For investors and traders alike, understanding the interplay between options activity and underlying stock performance will be key to navigating the evolving landscape of Infosys Ltd in the weeks ahead.

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