Infosys Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

On 12 February 2026, Infosys saw a remarkable volume of put options traded, particularly concentrated around strike prices ranging from ₹1,320 to ₹1,440. The most actively traded put was at the ₹1,380 strike, with 8,844 contracts exchanged, generating a turnover of approximately ₹872.37 lakhs. Close behind was the ₹1,360 strike with 8,655 contracts traded, followed by the ₹1,320 strike with 7,632 contracts. The ₹1,440 and ₹1,340 strikes also attracted substantial interest, with 6,153 and 7,470 contracts respectively.

Open interest figures further underscore the bearish sentiment, with the ₹1,380 strike holding an open interest of 2,863 contracts, and the ₹1,360 strike at 2,782 contracts. These levels indicate that traders are not only initiating new positions but also maintaining existing bearish bets or hedges as the expiry date approaches.

Stock Performance and Technical Context

Infosys has been under pressure in recent sessions, losing 6.43% over the last two days and underperforming its sector by 0.81% on the day of analysis. The stock opened sharply lower by 2.92% and touched an intraday low of ₹1,395.5, down 5.19%. It is currently trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a sustained downtrend.

The IT - Software sector itself has declined by 3.73%, reflecting broader market weakness. Investor participation has also waned, with delivery volumes falling by 43.71% compared to the five-day average, suggesting cautious sentiment among shareholders. Despite this, Infosys continues to offer a relatively high dividend yield of 3.13%, which may provide some support to long-term investors.

Market Capitalisation and Ratings Update

Infosys remains a large-cap heavyweight with a market capitalisation of ₹5,97,010 crores. However, its mojo score has recently been downgraded from a Buy to a Hold rating as of 9 February 2026, reflecting a more cautious outlook by analysts. The market cap grade stands at 1, indicating its significant size but also highlighting the challenges it faces amid current market conditions.

Implications of Put Option Concentration

The concentration of put option activity at strikes close to and below the current underlying price of ₹1,398.5 suggests that traders are positioning for a potential further decline or are hedging existing long exposures. The ₹1,380 and ₹1,360 strikes, in particular, have seen the highest turnover and open interest, indicating these levels are viewed as critical support zones by market participants.

Such heavy put buying can also reflect increased volatility expectations, as investors seek protection against downside risks in a volatile market environment. The expiry on 24 February 2026 is less than two weeks away, which may intensify price movements as traders adjust their positions.

Sectoral and Broader Market Context

Infosys’s recent weakness is not isolated; the broader IT - Software sector has been under pressure, with many stocks experiencing similar bearish option activity. The sector’s 3.73% decline on the day highlights investor concerns over earnings growth, margin pressures, and global macroeconomic uncertainties impacting technology spending.

Comparatively, the Sensex has been relatively resilient, falling only 0.45% on the same day, underscoring the sector-specific challenges faced by IT companies like Infosys. This divergence may prompt investors to reassess their sector allocations and risk exposures.

Investor Takeaways and Outlook

For investors, the surge in put option activity on Infosys signals caution. The stock’s technical breakdown below key moving averages and the downgrade in mojo grade to Hold suggest that downside risks remain elevated in the near term. Traders should monitor the ₹1,360 to ₹1,380 levels closely, as these strike prices are focal points for put option interest and may act as support or trigger further declines if breached.

Long-term investors may find comfort in the company’s strong market capitalisation and attractive dividend yield, but should remain vigilant to sectoral headwinds and global economic factors that could weigh on performance. Hedging strategies using put options might be prudent to manage risk during this uncertain phase.

Overall, the options market activity provides a valuable window into investor sentiment, highlighting a cautious stance on Infosys amid broader IT sector challenges and market volatility ahead of the February expiry.

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