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

Put Option Activity Highlights

Data from the derivatives market reveals that Infosys put options expiring on 30 March 2026 have attracted significant interest, with multiple strike prices registering heavy volumes and open interest. The most actively traded put contracts include strikes at ₹1200, ₹1240, ₹1260, ₹1280, and ₹1320, all clustered around the current underlying share price of ₹1312.7.

The ₹1200 strike saw the highest number of contracts traded at 3,544, generating a turnover of approximately ₹234.05 lakhs and an open interest of 4,392 contracts. Close behind, the ₹1280 strike recorded 2,050 contracts traded with a turnover of ₹316.77 lakhs and an open interest of 3,345. The ₹1260 and ₹1240 strikes also demonstrated robust activity, with 2,010 and 1,642 contracts traded respectively, indicating a broad-based put buying interest across strikes slightly below the current market price.

This clustering of put option activity below and near the current share price suggests that investors are either hedging existing long positions or speculating on a potential downside move in Infosys shares over the coming weeks.

Market Context and Stock Performance

Infosys is currently trading close to its 52-week low, just 3.03% above the ₹1264.1 mark, which adds to the cautious stance observed in the options market. Despite this, the stock has recorded gains over the last two consecutive sessions, rising by 2.2% in total, slightly outperforming the sector return of 1.12% and the Sensex’s modest 0.24% gain on the same day.

However, technical indicators paint a mixed picture. The stock is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a prevailing bearish trend. Additionally, investor participation appears to be waning, with delivery volumes on 25 February falling by nearly 11% compared to the five-day average, suggesting reduced conviction among buyers.

On the positive side, Infosys offers a relatively high dividend yield of 3.57%, which may provide some support to the stock price amid volatility. Liquidity remains adequate, with the stock able to handle trade sizes of up to ₹47.08 crores based on recent average traded values.

Investor Sentiment and Hedging Implications

The pronounced put option volumes at strikes below the current market price indicate a defensive posture among investors. Such activity often reflects hedging strategies designed to protect long equity holdings from downside risk, especially when the underlying stock is near a significant support level like a 52-week low.

Open interest figures reinforce this view, with the ₹1200 strike holding the largest open interest of 4,392 contracts, followed by ₹1280 and ₹1240 strikes with 3,345 and 2,543 contracts respectively. This concentration of open interest in out-of-the-money puts suggests that market participants are bracing for potential volatility or a correction in Infosys shares in the near term.

Moreover, the expiry date of 30 March 2026 is just over a month away, which typically sees increased option activity as traders adjust positions ahead of expiry. The clustering of put strikes around ₹1200 to ₹1320 also implies that traders are targeting a range of downside protection levels, reflecting uncertainty about the stock’s immediate trajectory.

Fundamental and Market Grade Analysis

Infosys currently holds a Mojo Score of 57.0 with a Mojo Grade of Hold, downgraded from Buy on 9 February 2026. This reflects a cautious outlook based on recent financial metrics and trend assessments. The company’s market cap stands at a substantial ₹5,23,287 crores, categorising it as a large-cap stock within the Computers - Software & Consulting sector.

The downgrade from Buy to Hold signals that while Infosys remains a fundamentally strong company, near-term headwinds and technical weaknesses warrant a more measured approach. Investors should weigh the stock’s attractive dividend yield against the risks implied by the options market and technical indicators.

Strategic Takeaways for Investors

Given the current market dynamics, investors holding Infosys shares should consider the implications of the elevated put option activity as a signal of increased downside risk or volatility. The concentration of put contracts near the current price and below suggests that market participants are actively seeking protection against potential declines.

For those considering fresh exposure, the Hold rating and technical weakness advise caution. Monitoring the stock’s ability to reclaim key moving averages and observing changes in delivery volumes will be critical in assessing the sustainability of recent gains.

Traders with a bearish outlook may find opportunities in put options at strikes between ₹1200 and ₹1280, where liquidity and open interest are highest. Conversely, long-term investors might view the current price levels and dividend yield as attractive entry points, provided they employ appropriate risk management strategies.

Overall, the options market activity around Infosys serves as a valuable barometer of investor sentiment, highlighting the importance of integrating derivatives data into comprehensive equity analysis.

Broader Market and Sector Context

Infosys’s performance and option market behaviour should also be viewed in the context of the broader Computers - Software & Consulting sector, which has shown moderate gains recently. The sector’s 1.12% one-day return outpaces the Sensex’s 0.24% gain, indicating relative strength despite individual stock volatility.

Investors may wish to compare Infosys’s risk-reward profile with peers in the sector and other large-cap stocks to identify more favourable opportunities, especially given the recent downgrade and technical challenges.

Conclusion

The surge in put option volumes and open interest for Infosys Ltd ahead of the 30 March 2026 expiry underscores a cautious market stance. While the stock has shown some short-term resilience, technical indicators and derivatives data suggest investors are hedging against potential downside risks. The Hold Mojo Grade and recent downgrade reflect this tempered outlook.

Investors should carefully monitor price action, delivery volumes, and option market trends to navigate the evolving risk landscape. Employing a balanced approach that considers both fundamental strengths and technical signals will be essential in making informed decisions on Infosys shares in the near term.

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