Infosys Sees Heavy Put Option Activity Ahead of February Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Infosys (INFY) put options expiring on 24 February 2026 have attracted substantial trading interest across several strike prices. The most active put contracts include strikes at ₹1320, ₹1300, ₹1380, ₹1400, and ₹1280, with the ₹1320 strike leading in terms of contracts traded.

Specifically, the ₹1320 put option saw 6,140 contracts traded, generating a turnover of approximately ₹90.63 lakhs and maintaining an open interest of 3,744 contracts. Close behind, the ₹1300 strike recorded 5,285 contracts traded with a turnover of ₹47.99 lakhs and an open interest of 4,819. The ₹1380 put option also saw heavy activity with 4,866 contracts traded and a turnover of ₹369.23 lakhs, supported by an open interest of 3,094 contracts.

Lower strike prices such as ₹1280 and ₹1400 also registered significant volumes, with 3,150 and 2,744 contracts traded respectively. The open interest at these strikes stands at 2,100 and 5,472 contracts, indicating that investors are actively positioning themselves across a broad range of price points below and near the current underlying value of ₹1,388.80.

Market Context and Underlying Stock Performance

Infosys is currently trading slightly below several key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, suggesting a short- to medium-term downtrend. Despite this, the stock recorded a day gain of 0.92%, outperforming the Sensex which declined by 0.13% on the same day. The sector average return stood at 0.71%, placing Infosys marginally ahead of its peers in the Computers - Software & Consulting space.

Investor participation appears to be waning, with delivery volumes on 18 February falling by 17.96% compared to the five-day average, registering 95.59 lakh shares. This decline in delivery volume may reflect a cautious stance among shareholders amid the recent volatility.

Infosys offers a relatively attractive dividend yield of 3.36% at the current price, which could provide some support to the stock amid the broader market uncertainty. The company’s large market capitalisation of ₹5,56,930 crore underlines its status as a heavyweight in the Indian IT sector.

Bearish Positioning and Hedging Implications

The concentration of put option activity at strikes below the current market price suggests that traders are either hedging existing long positions or speculating on a potential downside move in Infosys shares. The highest open interest at the ₹1400 strike, which is just above the current underlying price, indicates a significant level of protection being sought by investors against near-term declines.

Moreover, the substantial turnover and contracts traded at the ₹1320 and ₹1300 strikes reinforce the view that market participants are bracing for possible price weakness in the coming weeks. This pattern is consistent with a cautious outlook, possibly driven by broader macroeconomic concerns or sector-specific headwinds impacting the IT services industry.

It is also worth noting that the put option volumes far exceed typical levels for this period, highlighting an unusual surge in bearish sentiment or risk management activity. Such dynamics often precede increased volatility around expiry dates, as traders adjust their positions in response to evolving market conditions.

Technical and Fundamental Assessment

From a technical perspective, Infosys’ trading below all major moving averages signals a weakening trend, which may validate the bearish positioning observed in the options market. However, the stock’s large-cap status and steady dividend yield provide a degree of fundamental stability that could limit downside risk.

The company’s Mojo Score currently stands at 57.0 with a Mojo Grade of Hold, downgraded from Buy on 9 February 2026. This reflects a tempered outlook based on recent performance metrics and market conditions. The Market Cap Grade is rated 1, underscoring Infosys’ dominant position in the Computers - Software & Consulting sector.

Investors should weigh these factors carefully, considering both the technical signals and the company’s underlying fundamentals before making directional bets. The elevated put option activity may offer opportunities for strategic hedging or selective short-term trades, but the overall medium-term outlook remains nuanced.

Expiry Patterns and Market Outlook

The 24 February 2026 expiry is shaping up as a critical juncture for Infosys options traders. The clustering of open interest and turnover at multiple put strikes suggests that market participants are actively managing risk ahead of this date. Such expiry-driven activity often leads to increased price swings and volatility, which traders should anticipate.

Given the current underlying price of ₹1,388.80, the significant open interest at strikes ranging from ₹1280 to ₹1400 indicates a broad range of expectations for potential downside. This dispersion may reflect uncertainty about near-term catalysts, including quarterly earnings, sectoral developments, or macroeconomic data releases.

Investors and traders should monitor open interest changes and volume trends closely in the days leading up to expiry, as shifts in positioning can provide early signals of directional bias or volatility spikes.

Conclusion

Infosys Ltd’s options market is currently dominated by heavy put option activity, signalling a cautious or bearish stance among investors as the February expiry approaches. The concentration of open interest and turnover at strikes below and near the current market price highlights a preference for downside protection or speculative short positions.

While the stock’s fundamentals remain solid with a sizeable market cap and attractive dividend yield, technical indicators and investor behaviour suggest a period of uncertainty and potential volatility ahead. Market participants should consider these factors carefully when formulating trading or hedging strategies in Infosys shares.

Overall, the surge in put option volumes underscores the importance of closely tracking derivatives data as a barometer of market sentiment and risk appetite in large-cap Indian IT stocks.

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