Infosys Sees Heavy Put Option Activity Ahead of February Expiry

Put Option Activity Highlights

On 9 February 2026, Infosys recorded substantial put option volumes, particularly concentrated around the 1400, 1480, and 1500 strike prices, all expiring on 24 February 2026. The most active strike was the 1500 put, with 2,958 contracts traded, generating a turnover of ₹388.44 lakhs and an open interest of 6,354 contracts. The 1480 strike followed closely with 2,429 contracts traded, turnover of ₹241.25 lakhs, and open interest standing at 2,831. The 1400 strike saw 1,919 contracts traded, turnover of ₹55.04 lakhs, and open interest of 6,350 contracts.

This concentrated activity at and just below the current underlying value of ₹1,500.6 indicates a strategic positioning by market participants anticipating potential downside or seeking protection against volatility in the near term. The open interest figures, particularly at the 1500 and 1400 strikes, underscore sustained interest in these levels, reflecting a hedging stance or outright bearish bets.

Market Context and Price Action

Infosys outperformed its sector by 0.51% on the day, registering a 0.37% gain compared to the sector’s 0.50% rise and the Sensex’s 0.32% increase. Notably, the stock reversed a four-day losing streak, trading within a narrow range of ₹14, signalling consolidation. However, the stock remains below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a prevailing downtrend in the medium to long term.

Investor participation has waned, with delivery volume on 9 February falling by 29.04% to 57.34 lakhs against the five-day average, suggesting reduced conviction in the recent price movements. Despite this, Infosys offers a relatively attractive dividend yield of 3.08%, which may provide some support to the stock price amid volatility.

Fundamental and Rating Overview

Infosys, with a market capitalisation of ₹6,07,005 crores, is classified as a large-cap stock within the Computers - Software & Consulting industry. The company’s Mojo Score currently stands at 60.0, reflecting a Hold grade as of 9 February 2026, downgraded from Buy on 9 February 2026. The Market Cap Grade is 1, indicating a top-tier market capitalisation but tempered by recent rating adjustments.

This rating revision aligns with the cautious sentiment observed in the options market, where investors appear to be hedging against potential downside risks despite the company’s robust fundamentals and sector leadership.

Implications of Put Option Concentration

The heavy put option activity at strike prices near the current market value suggests that traders are either positioning for a potential correction or seeking to hedge existing long positions. The 1500 strike, being at-the-money, is the focal point for protection, while the 1480 and 1400 strikes represent deeper out-of-the-money puts that could benefit from a sharper decline.

Open interest accumulation at these strikes indicates that these positions are not merely speculative but may be part of structured hedging strategies by institutional investors or sophisticated traders. This is particularly relevant given the stock’s recent underperformance relative to its moving averages and the decline in delivery volumes, which may signal reduced buying interest.

Expiry Patterns and Volatility Outlook

With the 24 February 2026 expiry approaching, the concentration of put options at these strikes could lead to increased volatility as traders adjust their positions. The narrow trading range observed recently may give way to wider price swings if the stock breaches key support levels around ₹1,480 to ₹1,400.

Investors should monitor open interest changes and volume spikes in the options market closely, as these can provide early signals of directional moves. The current scenario suggests a cautious approach, balancing the stock’s dividend yield and large-cap status against the technical and sentiment-driven risks highlighted by options activity.

Investor Takeaways and Strategic Considerations

For investors holding Infosys shares, the current options market activity serves as a cautionary signal to reassess risk exposure. The presence of significant put option volumes at strikes close to the current price suggests that downside protection is being sought, possibly in anticipation of near-term volatility or sector-specific headwinds.

Conversely, the stock’s high dividend yield and large-cap status provide a defensive cushion, appealing to income-focused investors. The recent Hold rating by MarketsMOJO, down from Buy, reflects a tempered outlook that balances these factors.

Traders may consider using put options themselves to hedge long positions or to speculate on potential declines, while long-term investors should watch for confirmation of trend reversals before increasing exposure. Monitoring the evolution of open interest and volume in the lead-up to expiry will be critical for gauging market sentiment shifts.

Sector and Market Comparison

Within the Computers - Software & Consulting sector, Infosys’s performance and options activity stand out due to its size and liquidity. The stock’s 1-day return of 0.37% slightly trails the sector’s 0.50% gain but outpaces the Sensex’s 0.32% rise, indicating relative resilience despite bearish options positioning.

Liquidity remains robust, with the stock capable of supporting trade sizes up to ₹45.35 crores based on 2% of the five-day average traded value, ensuring that both institutional and retail investors can execute sizeable trades without significant market impact.

Conclusion

Infosys Ltd’s recent surge in put option trading ahead of the 24 February 2026 expiry highlights a cautious market stance, with investors seeking downside protection amid a consolidating price environment and a downgraded rating. While the company’s fundamentals and dividend yield offer support, the technical signals and options market activity warrant close attention.

Investors should weigh the risks of near-term volatility against the stock’s long-term prospects, using options data as a valuable tool for informed decision-making in this large-cap IT sector heavyweight.

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