Infosys Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity and Market Context

Infosys Ltd (INFY), a leading player in the Computers - Software & Consulting sector, recorded significant put option volumes with 3,016 contracts traded for the 30 December 2025 expiry. The turnover for these contracts stood at ₹5.55 lakhs, while open interest reached 7,086 contracts, indicating sustained interest in downside protection or speculative bearish bets at the 1620 strike price. This strike is positioned below the current underlying value of ₹1,664.5, suggesting that market participants are preparing for potential price corrections or are hedging existing long positions.

The put option activity is particularly noteworthy given Infosys’s recent price behaviour. The stock has gained after two consecutive days of decline and outperformed its sector by 0.27% on the day under review. It also trades above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, reflecting a generally positive technical trend.

Price and Volume Dynamics

On 24 December 2025, Infosys’s delivery volume was recorded at 16.97 lakh shares, which represents a decline of 76.59% compared to the five-day average delivery volume. This drop in investor participation could be interpreted as a cautious approach by market participants ahead of the expiry, possibly contributing to the increased put option interest as a form of risk mitigation.

Liquidity metrics also support the stock’s active trading status. Based on 2% of the five-day average traded value, Infosys is liquid enough to accommodate trade sizes of approximately ₹37.34 crore, making it accessible for institutional and retail traders alike to execute sizeable positions without significant market impact.

Sector and Market Comparison

Infosys’s one-day return of 0.09% contrasts with the sector’s decline of 0.35% and the Sensex’s fall of 0.19%, underscoring the stock’s relative resilience in a broadly negative market environment. This divergence may explain the mixed signals seen in options trading, where bullish price action coexists with increased put option interest, reflecting a nuanced market outlook.

The company’s market capitalisation stands at ₹6,74,048 crore, categorising it firmly as a large-cap stock within the Computers - Software & Consulting industry. This scale typically attracts diverse investor profiles, including those employing options strategies for hedging or speculative purposes.

Expiry Patterns and Strike Price Significance

The concentration of put option contracts at the 1620 strike price for the 30 December 2025 expiry suggests that traders are focusing on a key support level approximately 2.6% below the current market price. This level may be viewed as a critical threshold where downside risk could materialise, prompting protective positioning.

Open interest of 7,086 contracts at this strike indicates that these positions are not merely short-term trades but potentially part of longer-term hedging strategies or speculative plays anticipating a price correction before the expiry date. The expiry itself is imminent, adding urgency to these positions as traders adjust their portfolios in response to evolving market conditions.

Investor Sentiment and Hedging Implications

The elevated put option activity in Infosys may reflect a cautious investor sentiment despite the stock’s technical strength and recent gains. Put options are commonly used to hedge against potential downside or to speculate on price declines, and the volume and open interest data suggest that market participants are actively managing risk ahead of the December expiry.

Given the stock’s position above all major moving averages, the presence of significant put option interest could indicate a hedging strategy by investors seeking to protect profits or limit losses in the event of a market pullback. Alternatively, it may signal anticipation of volatility or a potential reversal in the near term.

Such dynamics are typical in large-cap stocks with substantial institutional ownership, where options markets serve as a vital tool for portfolio risk management.

Outlook and Considerations for Traders

Traders and investors monitoring Infosys should consider the implications of the heavy put option activity alongside the stock’s price trends and sector performance. While the technical indicators point to an overall positive momentum, the options data highlights a layer of caution that may influence near-term price movements.

As the 30 December expiry approaches, shifts in open interest and trading volumes in both puts and calls will provide further insight into market expectations. Close attention to strike prices around 1620 and the underlying stock’s reaction to support and resistance levels will be crucial for informed decision-making.

Additionally, the liquidity profile of Infosys supports active trading strategies, allowing market participants to enter and exit positions with relative ease, which may contribute to dynamic options market activity in the coming days.

Summary

Infosys Ltd’s put option market activity ahead of the December expiry reveals a complex interplay of bullish price action and bearish hedging or speculative positioning. The concentration of put contracts at the 1620 strike price, combined with substantial open interest, underscores investor caution despite the stock’s technical strength and outperformance relative to its sector and the Sensex.

Market participants should weigh these factors carefully, recognising that options data can provide valuable signals about underlying sentiment and potential price volatility. As always, a balanced approach considering both fundamental and technical aspects will be essential for navigating the evolving landscape of Infosys’s stock performance.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Today