Infosys Sees Heavy Put Option Activity Ahead of March Expiry Amid Bearish Sentiment

Heavy Put Option Trading Highlights Investor Caution

Data from the latest derivatives activity reveals that Infosys put options expiring on 30 March 2026 have attracted significant volumes, with strike prices clustered around and below the current underlying value of ₹1,306. The most actively traded put contracts include the ₹1,300 strike with 4,177 contracts traded, generating a turnover of ₹842.25 lakhs and an open interest of 4,435 contracts. This is closely followed by the ₹1,280 strike, which saw 2,645 contracts traded, turnover of ₹449.02 lakhs, and open interest of 3,371 contracts.

Other notable strikes include ₹1,200 (2,745 contracts traded, ₹209.83 lakhs turnover, 4,540 open interest), ₹1,260 (2,184 contracts, ₹304.19 lakhs turnover, 2,064 open interest), and ₹1,100 (1,585 contracts, ₹42.54 lakhs turnover, 4,206 open interest). The concentration of put option activity at these strike prices below the current market price suggests a strategic hedging approach or outright bearish bets by market participants.

Expiry Patterns and Open Interest Indicate Positioning

The expiry date of 30 March 2026 is a key focal point for traders, with open interest figures indicating substantial outstanding positions. The elevated open interest at the ₹1,200 and ₹1,300 strikes, both close to the current share price, points to a significant number of investors either protecting long positions or speculating on a downside move. The open interest at ₹1,100 strike, despite being further out-of-the-money, remains sizeable, reflecting a defensive stance against a sharper correction.

Such patterns are often indicative of market participants preparing for potential volatility or a pullback, especially in a stock that has recently experienced a five-day consecutive fall before gaining ground again. The put option activity thus serves as a barometer of investor sentiment, which currently leans towards caution despite the stock’s recent resilience.

Stock Performance and Technical Context

Infosys closed the latest session at ₹1,306, recovering from a near 52-week low of ₹1,264.1, just 2.94% away. The stock’s intraday high touched ₹1,314.8, marking a 3.08% gain on the day, outperforming the broader Sensex which rose 0.57%, and the IT - Software sector which gained 2.11%. However, the stock remains below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling that the medium to long-term trend remains under pressure.

Investor participation has notably increased, with delivery volume on 24 February reaching 1.69 crore shares, a 120.72% rise compared to the five-day average. This heightened activity, combined with a dividend yield of 3.61%, underscores the stock’s appeal to income-focused investors despite near-term uncertainties.

Mojo Score Downgrade Reflects Cautious Outlook

MarketsMOJO assigns Infosys a Mojo Score of 57.0 with a Mojo Grade of Hold, downgraded from Buy on 9 February 2026. This adjustment reflects tempered expectations amid the current market dynamics and the stock’s technical challenges. The company’s market capitalisation stands at a robust ₹5,17,691 crore, categorising it as a large-cap stock with a Market Cap Grade of 1, indicating strong market presence but also heightened scrutiny from investors.

The downgrade aligns with the increased put option activity, suggesting that market participants are factoring in potential downside risks or volatility in the coming weeks. Investors should weigh these signals carefully against the stock’s fundamentals and sector performance.

Sectoral and Market Context

The IT - Software sector has shown resilience with a 2.11% gain on the day, supported by broader technology demand and digital transformation trends. However, Infosys’s relative underperformance against its sector peers and the Sensex’s modest 0.57% rise indicates stock-specific pressures. The divergence between sector strength and Infosys’s cautious technical stance may be driving the hedging activity observed in the options market.

Given the stock’s liquidity, with a 5-day average traded value supporting trade sizes up to ₹49.49 crore, investors can execute sizeable positions without significant market impact. This liquidity also facilitates active options trading, contributing to the observed volumes and open interest.

Investor Implications and Outlook

The surge in put option activity at strike prices near and below the current market price of Infosys shares signals a cautious stance among investors. This may be driven by concerns over near-term earnings volatility, macroeconomic uncertainties, or sector-specific headwinds. The stock’s technical positioning below key moving averages further supports the view that downside risks remain present.

For investors holding long positions, the elevated put open interest can be interpreted as a form of portfolio insurance, mitigating potential losses if the stock declines. Conversely, traders with a bearish outlook may be positioning to capitalise on a correction or increased volatility ahead of the March expiry.

Given the stock’s dividend yield of 3.61% and strong market capitalisation, long-term investors may find value in maintaining exposure while monitoring technical signals closely. Short-term traders should remain vigilant for price action around the key strike prices highlighted by options activity, as these levels may act as support or resistance in the coming weeks.

Overall, the options market activity provides a valuable lens into investor sentiment, complementing fundamental and technical analysis to inform more nuanced investment decisions.

Conclusion

Infosys Ltd’s recent spike in put option volumes and open interest ahead of the 30 March 2026 expiry underscores a growing bearish or hedging sentiment among market participants. Despite a modest recovery in share price and sectoral gains, the stock faces technical challenges and cautious investor positioning. The downgrade in Mojo Grade to Hold further reflects tempered expectations. Investors should closely monitor options market trends alongside price movements to gauge evolving risk and opportunity in this large-cap IT heavyweight.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →