Rs 1,240 Puts — 2.5% Below Current Price — Draw 2,156 Contracts on Infosys Ltd

Put Options Event and Cash Market Context

The most active put strikes for Infosys Ltd on 25 Mar 2026 were Rs 1,240 and Rs 1,260, with 2,156 and 3,125 contracts traded respectively, generating turnovers of approximately ₹80.46 lakhs and ₹203 lakhs. The open interest at these strikes stands at 3,274 and 3,289 contracts, indicating a moderate build-up of positions ahead of the 30 Mar 2026 expiry. The underlying stock closed at Rs 1,270.8, down marginally by 0.13% on the day, after a three-day rally that has lifted the price from near its 52-week low of Rs 1,215.1.

This combination of active put trading and a recent rally in the stock price presents an intriguing scenario — Infosys Ltd is not in freefall, yet put activity is elevated. Is this a sign of protective hedging or a bearish bet?

Strike Price Analysis: Moneyness and Intent

The Rs 1,240 strike sits approximately 2.5% out-of-the-money (OTM) relative to the current price, while the Rs 1,260 strike is roughly 0.8% out-of-the-money. Both strikes are close to the money but not in-the-money (ITM), which is a critical detail. OTM puts bought during a rising or stable market often indicate hedging rather than outright bearish speculation. The Rs 1,240 strike, being further OTM, suggests protection against a moderate pullback rather than a sharp decline.

Given the proximity of these strikes to the current price and the stock’s recent upward momentum, the put activity likely reflects a desire to guard against short-term volatility rather than a conviction of a steep fall. Infosys Ltd traders may be positioning for a potential retracement to support levels rather than a collapse.

Interpreting the Put Activity: Hedging, Bearish Positioning, or Put Writing?

Put options can serve multiple purposes. First, put buying can be a bearish directional bet, anticipating a decline below the strike price. Second, it can be a hedge, protecting long stock holdings from downside risk. Third, put writing (selling) can be a bullish strategy, collecting premium with the expectation that the stock will stay above the strike.

In this case, the Rs 1,240 and Rs 1,260 puts are OTM and traded in significant volume but with open interest not dramatically outpacing contracts traded, suggesting fresh positioning rather than unwinding. The stock’s recent rally and position above its 5-day moving average but below longer-term averages supports the hedging interpretation. The put strikes roughly align with technical support zones, consistent with protective strategies rather than outright bearish bets. Could this be a sign that traders are safeguarding gains amid uncertainty?

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest is approximately 0.66 for the Rs 1,240 strike and 0.95 for the Rs 1,260 strike, indicating a substantial amount of fresh activity. This suggests that traders are actively establishing new positions rather than merely adjusting existing ones. The open interest levels are moderate, implying that while the put activity is significant, it is not extreme enough to signal panic or aggressive bearish positioning.

Moreover, the turnover figures show that the Rs 1,260 strike commands more premium value, possibly reflecting higher demand for nearer-to-the-money protection. This pattern aligns with a cautious stance rather than outright bearish conviction.

Cash Market Context: Moving Averages and Delivery Volumes

Infosys Ltd currently trades above its 5-day moving average but remains below the 20-day, 50-day, 100-day, and 200-day averages. This mixed technical picture suggests short-term strength amid longer-term resistance. The Rs 1,240 put strike is positioned near a support zone below the 50-day moving average, reinforcing the idea that put buyers are hedging against a pullback to this level rather than expecting a sharp decline.

Delivery volumes rose by 6.67% to 79.1 lakh shares on 24 Mar 2026, signalling increased investor participation. However, the stock underperformed its sector by 0.42% and the Sensex by 1.38% on the day, indicating some caution. The combination of rising delivery volumes and put buying suggests that investors may be protecting profits amid a cautious outlook rather than capitulating. Is this a prudent defensive stance or a sign of underlying weakness?

Fundamental and Sector Overview

Infosys Ltd remains a large-cap leader in the Computers - Software & Consulting sector with a market capitalisation of ₹5,18,360 crores. The stock offers a dividend yield of 3.61%, which adds to its appeal for income-focused investors. Despite recent volatility, the company’s fundamentals remain stable, supporting the view that the put activity is more likely protective than a reflection of deteriorating business prospects.

Conclusion: Protective Hedging Most Likely

The put option activity in Infosys Ltd on 25 Mar 2026, concentrated at strikes just below the current price, combined with the stock’s recent rally and mixed technical signals, points towards a protective hedging interpretation. The OTM nature of the puts, moderate open interest, and rising delivery volumes support the view that investors are seeking to guard against a short-term pullback rather than betting on a sharp decline.

While bearish positioning cannot be entirely ruled out, the data suggests that the put activity is more nuanced, reflecting caution amid a stabilising market rather than outright pessimism. Should investors consider similar protective strategies or is the rally set to continue?

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