Infosys Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 9 February 2026, Infosys emerged as one of the most actively traded stocks in the put options segment. The strike prices attracting the highest put option volumes were ₹1,400 and ₹1,500, both expiring on 24 February 2026. Specifically, the ₹1,500 strike saw 3,594 contracts traded, generating a turnover of ₹412.88 lakhs and an open interest of 5,104 contracts. Meanwhile, the ₹1,400 strike recorded 2,495 contracts traded, with a turnover of ₹54.89 lakhs and an open interest of 6,240 contracts.

The underlying stock price at the time stood at ₹1,502.5, indicating that the ₹1,500 strike is effectively at-the-money, while the ₹1,400 strike is slightly out-of-the-money. The substantial open interest and turnover at these strikes suggest that market participants are positioning for potential downside or are actively hedging existing long exposures.

Price and Technical Performance

Infosys has underperformed its sector by 0.44% on the day, with a 1-day return of -0.25% compared to the sector’s 0.13% and the Sensex’s 0.40%. More notably, the stock has been on a consecutive four-day decline, losing 9.28% over this period. This downtrend is reinforced by the fact that Infosys is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bearish momentum in the short to medium term.

Investor participation has risen, with delivery volume reaching 84.89 lakhs on 6 February, a 10.58% increase over the five-day average delivery volume. This heightened activity may reflect increased selling pressure or cautious repositioning by institutional investors.

Dividend Yield and Liquidity Considerations

Despite recent price weakness, Infosys continues to offer a healthy dividend yield of 3.06% at current levels, which may provide some support to long-term investors. The stock’s liquidity remains robust, with a 5-day average traded value sufficient to accommodate trade sizes up to ₹44.79 crores without significant market impact, making it attractive for both retail and institutional traders.

Investor Sentiment and Market Positioning

The heavy put option volumes at near-the-money strikes reflect a cautious or bearish stance among traders. Put options are commonly used either as outright bearish bets or as hedges against long stock positions. The elevated open interest at ₹1,400 and ₹1,500 strikes suggests that investors are bracing for potential downside risks in the near term, possibly due to broader market volatility or company-specific concerns.

Infosys’s recent downgrade from Hold to Buy by MarketsMOJO on 22 December 2025, accompanied by a Mojo Score of 70.0, indicates that while the company’s fundamentals remain strong, short-term technical factors and market sentiment are weighing on the stock. This dichotomy is often reflected in option market activity, where hedging and speculative trades increase ahead of key expiry dates.

Expiry Patterns and Strategic Implications

The 24 February 2026 expiry date is attracting concentrated put option interest, which may lead to increased volatility as the expiry approaches. Traders should monitor open interest changes and price movements closely, as shifts in option positioning can foreshadow directional moves in the underlying stock.

Given Infosys’s large market capitalisation of ₹6,10,999 crores and its status as a blue-chip stock in the Computers - Software & Consulting sector, these option market signals are particularly noteworthy. They may indicate a tactical pause or profit-taking phase among investors, despite the company’s long-term growth prospects.

Outlook and Investor Takeaways

While Infosys’s fundamentals remain robust, the current technical weakness and pronounced put option activity suggest that investors should exercise caution in the near term. The stock’s trading below all major moving averages and the four-day consecutive decline highlight a bearish phase that could persist until a clear reversal signal emerges.

Investors with long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, contrarian investors might view the elevated put activity and dividend yield of 3.06% as an opportunity to accumulate shares at more attractive valuations, anticipating a rebound once selling pressure subsides.

Monitoring the evolution of open interest and volume in the February expiry will be critical for gauging market sentiment and potential price inflection points. Given Infosys’s liquidity and large-cap status, it remains a key stock to watch within the broader IT sector and the Indian equity market.

Summary

In summary, Infosys Ltd is currently experiencing significant put option trading at the ₹1,400 and ₹1,500 strikes ahead of the 24 February 2026 expiry, reflecting heightened bearish sentiment and hedging activity. The stock’s recent underperformance relative to its sector and the Sensex, combined with technical weakness and rising delivery volumes, underscores a cautious near-term outlook. However, its strong fundamentals, upgraded Mojo Grade to Buy, and attractive dividend yield provide a balanced perspective for investors navigating this phase.

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