Infosys Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights

On 13 February 2026, Infosys recorded significant put option volumes concentrated around strike prices ranging from ₹1,240 to ₹1,400, all expiring on 24 February 2026. The most actively traded put contracts were at the ₹1,320 strike, with 9,541 contracts changing hands, generating a turnover of approximately ₹1,848.28 lakhs and an open interest of 2,750 contracts. Close behind were the ₹1,400 strike puts, with 5,620 contracts traded, turnover of ₹2,279.02 lakhs, and an open interest of 5,673 contracts.

Other notable strikes included ₹1,260 (6,705 contracts), ₹1,240 (7,211 contracts), and ₹1,340 (5,267 contracts), all showing robust trading volumes and open interest. The underlying stock price at the time was ₹1,308, placing many of these puts either at-the-money or slightly out-of-the-money, indicating strategic positioning for potential downside protection or speculative bearish bets.

Price Performance and Market Context

Infosys has been under pressure in recent sessions, with the stock hitting a new 52-week low of ₹1,281.5 on 13 February 2026. The share price has declined by 13.17% over the past three days, underperforming its sector, which fell by 4.41%, and the broader Sensex, which was down 0.98% on the same day. The stock opened sharply lower by 6.65% on 13 February and touched an intraday low of ₹1,281.5, reflecting intensified selling pressure.

Technical indicators also point to a bearish trend, with Infosys trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This sustained weakness has likely prompted investors to seek downside protection through put options or to speculate on further declines.

Investor Behaviour and Hedging Strategies

The surge in put option volumes at strikes above and near the current market price suggests a dual motive among market participants. Some investors appear to be hedging existing long positions against further downside risk, while others may be positioning for a potential correction or volatility spike in the near term. The open interest data supports this, with substantial outstanding contracts at the ₹1,400 and ₹1,320 strikes, indicating ongoing interest in downside protection or bearish speculation.

Additionally, the delivery volume on 12 February rose sharply by 155.52% compared to the five-day average, signalling increased investor participation amid the sell-off. Despite the recent weakness, Infosys continues to offer a relatively high dividend yield of 3.32%, which may provide some support to long-term holders.

Mojo Score and Analyst Ratings

Infosys currently holds a Mojo Score of 60.0, reflecting a Hold rating, which was downgraded from Buy on 9 February 2026. The downgrade reflects the recent deterioration in price momentum and technical indicators, as well as the cautious stance adopted by investors amid sectoral headwinds. The company’s market capitalisation stands at a robust ₹5,62,464 crores, categorising it as a large-cap stock within the Computers - Software & Consulting industry.

Despite the downgrade, Infosys maintains a Market Cap Grade of 1, indicating its dominant position in the sector. However, the recent price underperformance relative to the sector and the Sensex suggests that investors are reassessing near-term growth prospects and risk factors.

Expiry Patterns and Implications

The concentration of put option activity around the 24 February 2026 expiry date is notable. This expiry is less than two weeks away, implying that traders are positioning for a potential near-term correction or volatility event. The clustering of open interest at strikes above the current market price suggests that investors are either hedging against further downside or speculating on a pullback to levels between ₹1,240 and ₹1,400.

Given the stock’s recent volatility and technical weakness, these put options could serve as effective insurance for longs or as speculative instruments for bears anticipating further declines. The turnover figures, exceeding ₹2,200 lakhs at the ₹1,400 strike alone, highlight the significant capital being deployed in these bearish instruments.

Sectoral and Market Considerations

The broader IT - Software sector has also experienced a decline of 4.41% on the day, reflecting a challenging environment for technology stocks amid global macroeconomic uncertainties and tightening monetary policies. Infosys’ sharper fall of 6.41% and its underperformance relative to the sector by 1.54% indicate company-specific concerns or profit-taking pressures.

Investors should weigh these factors carefully, considering both the company’s strong fundamentals and the current technical weakness. The elevated put option activity may signal a cautious stance, but it also offers opportunities for strategic hedging or tactical trading around the upcoming expiry.

Liquidity and Trading Dynamics

Infosys remains a highly liquid stock, with a delivery volume of 1.51 crore shares on 12 February 2026, representing a 155.52% increase over the five-day average. The stock’s liquidity supports sizeable trade sizes, with an estimated tradable value of ₹39.35 crores based on 2% of the five-day average traded value. This liquidity facilitates active options trading and allows investors to implement complex hedging or speculative strategies efficiently.

Conclusion

The surge in put option volumes and open interest at multiple strike prices ahead of the 24 February expiry highlights a growing bearish sentiment or hedging demand in Infosys Ltd. The stock’s recent price weakness, technical breakdown below key moving averages, and underperformance relative to its sector reinforce this cautious outlook. Investors should monitor the evolving options activity and price action closely, as these dynamics may presage further volatility or a potential correction in the near term.

While the company’s fundamentals and dividend yield remain attractive, the current market environment favours a prudent approach, balancing downside protection with selective exposure to potential recovery opportunities.

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