Infosys Sees Heavy Put Option Activity Ahead of January Expiry Amid Bearish Hedging

Put Option Activity Highlights

On 22 January 2026, Infosys recorded significant volumes in put options, particularly at strike prices of ₹1,660 and ₹1,640, both expiring on 27 January 2026. The ₹1,660 strike saw 4,042 contracts traded, generating a turnover of ₹101.05 lakhs, with open interest standing at 4,724 contracts. Meanwhile, the ₹1,640 strike price attracted 4,457 contracts, with turnover of ₹39.22 lakhs and open interest of 4,494 contracts. These figures underscore a concentrated bearish sentiment or protective hedging strategies among market participants.

The underlying stock price hovered around ₹1,665 on the day, placing these strike prices just below or near the current market level. This proximity suggests that traders are positioning for potential downside or seeking insurance against near-term volatility as the expiry date approaches.

Market Context and Stock Performance

Infosys’s stock performance on 22 January was relatively stable, with a day gain of 0.70%, slightly underperforming the sector’s 1.21% rise and the Sensex’s 0.96% advance. The stock has reversed its trend after three consecutive days of decline, trading within a narrow range of ₹10.7, indicating consolidation. Notably, Infosys is trading above its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling underlying strength despite the cautious option market positioning.

However, investor participation appears to be waning, with delivery volume on 21 January falling by 32.13% to 35.02 lakh shares compared to the five-day average. Liquidity remains adequate, supporting trade sizes up to ₹31.01 crore based on 2% of the five-day average traded value, ensuring that the stock remains accessible for institutional and retail investors alike.

Investor Sentiment and Hedging Implications

The surge in put option volumes at strikes close to the current market price suggests that investors are either hedging existing long positions or speculating on a near-term correction. The open interest figures, which remain elevated, indicate that these positions are not merely transient but reflect a sustained bearish or protective stance.

Given Infosys’s large market capitalisation of ₹6,71,049 crore and its status as a sector heavyweight, such option market activity is closely watched as a barometer of institutional sentiment. The Mojo Score of 70.0 and recent upgrade from Hold to Buy on 22 December 2025 further complicate the narrative, as fundamental optimism contrasts with cautious derivatives positioning.

Expiry Patterns and Strategic Considerations

The 27 January expiry is a critical juncture for Infosys options traders. The concentration of put contracts at ₹1,660 and ₹1,640 strikes, both just below the spot price, points to a strategic focus on downside protection within a tight price band. This pattern is typical ahead of monthly expiries when traders recalibrate risk exposures and adjust hedges in response to evolving market conditions.

Moreover, the relatively high turnover in the ₹1,660 strike put option, exceeding ₹1 crore, highlights active participation and liquidity in this segment, making it a focal point for price discovery and volatility expectations.

Technical and Fundamental Outlook

Technically, Infosys’s position above all major moving averages suggests a bullish medium-to-long-term trend. The recent trend reversal after a short-term dip supports this view, although the narrow trading range indicates a wait-and-watch approach by investors.

Fundamentally, the company’s upgrade to a Buy rating by MarketsMOJO, accompanied by a strong Mojo Grade, reflects confidence in its earnings growth, market positioning, and sector prospects. The large-cap status and robust market cap grade of 1 further reinforce its appeal as a core portfolio holding.

Balancing Bearish Options with Bullish Fundamentals

The coexistence of heavy put option activity and a positive fundamental outlook presents a nuanced picture for investors. While the derivatives market signals caution or hedging against downside risks, the underlying stock’s technical strength and recent rating upgrade suggest resilience and potential for upside.

Investors should consider this divergence carefully. The put option volumes may reflect prudent risk management rather than outright bearishness, especially given the proximity of strike prices to the current market level and the impending expiry date.

For traders, the liquidity and turnover in these put options offer opportunities to implement hedging strategies or speculative plays aligned with their risk appetite and market view. Meanwhile, long-term investors may view the current option market activity as a temporary volatility buffer rather than a signal to exit positions.

Conclusion

Infosys Ltd’s active put option trading ahead of the 27 January 2026 expiry highlights a cautious stance among market participants, with significant volumes and open interest concentrated at strikes just below the current stock price. This activity suggests a blend of bearish positioning and hedging, set against a backdrop of solid fundamentals and technical strength.

As expiry approaches, monitoring changes in open interest and volume across these strikes will be crucial to gauge evolving investor sentiment and potential price movements. For now, the interplay between option market caution and fundamental optimism makes Infosys a stock to watch closely in the coming weeks.

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