Robust Put Option Volumes Signal Growing Bearish Interest
On 31 July 2026, Infosys recorded substantial put option volumes concentrated at strike prices of ₹1,080, ₹1,100, and ₹1,120, all expiring on 25 August 2026. The most active strike was ₹1,100, with 7,635 contracts traded, generating a turnover of approximately ₹860.9 lakhs and an open interest of 10,523 contracts. The ₹1,120 strike followed with 3,521 contracts traded, turnover of ₹522.1 lakhs, and open interest of 4,933 contracts. Meanwhile, the ₹1,080 strike saw 2,602 contracts traded, turnover of ₹219.4 lakhs, and open interest of 2,908 contracts.
This concentration of put activity near the current underlying price of ₹1,124.6 suggests investors are positioning for potential downside or seeking protection against further declines. The open interest figures indicate that these positions are not merely speculative but represent significant hedging or directional bets.
Price Action and Technical Context
Infosys has underperformed its sector, the IT - Software segment, which itself declined by 2.09% on the day. The stock fell 3.19% on 31 July 2026, opening with a gap down of 3.13% and touching an intraday low of ₹1,107.2, a 4.15% drop from the previous close. This marks the second consecutive day of losses, with a cumulative decline of 3.43% over this period.
Technically, the stock remains above its 5-day, 20-day, and 50-day moving averages but trades below its 100-day and 200-day averages, indicating mixed momentum. The recent price weakness combined with the heavy put option interest suggests investors are wary of a deeper correction or increased volatility in the near term.
Investor Participation and Liquidity Considerations
Delivery volumes have declined, with a 13.21% drop against the 5-day average, signalling reduced investor participation amid the recent price fall. Despite this, liquidity remains adequate, with the stock’s traded value supporting sizeable trades up to ₹62.05 crores based on 2% of the 5-day average traded value.
Infosys’s large-cap status and market capitalisation of ₹4,69,097 crores continue to attract institutional interest, but the current put option activity highlights a cautious stance among market participants.
Mojo Score Upgrade Reflects Mixed Sentiment
Infosys’s Mojo Score currently stands at 62.0, upgraded from a previous Sell rating to a Hold on 13 April 2026. This shift reflects a tempered outlook, balancing the company’s strong fundamentals and dividend yield of 4.2% against recent price weakness and sector headwinds. The Hold grade suggests investors should monitor developments closely, particularly given the heightened put option activity signalling potential downside risks.
Expiry Patterns and Strategic Implications
The expiry date of 25 August 2026 is a focal point for options traders, with the clustering of put contracts at strikes just below and near the current market price indicating a defensive posture. Such positioning often serves as a hedge against market volatility or a bearish directional bet anticipating further declines.
Investors holding long positions in Infosys may be utilising these puts to protect gains or limit losses, while speculators might be betting on a correction given the recent underperformance relative to the IT sector and broader market indices.
Sectoral and Market Context
The IT - Software sector has faced pressure recently, with a 2.09% decline on the day of analysis. Infosys’s 3.19% drop outpaced the sector, reflecting company-specific concerns or profit-taking. The Sensex, by contrast, was largely flat, gaining 0.06%, underscoring the sector-specific nature of the weakness.
This divergence highlights the importance of sectoral dynamics in shaping investor sentiment and option market activity for Infosys.
Investor Takeaways
For investors, the heavy put option activity at strike prices close to the current market value signals caution. While Infosys’s fundamentals remain robust, the technical signals and option market positioning suggest a period of heightened volatility or potential downside risk ahead of the August expiry.
Those with exposure to Infosys should consider hedging strategies or closely monitor price action and sector trends. The stock’s dividend yield of 4.2% remains attractive, but the recent downgrade from Sell to Hold and the bearish option flow warrant prudence.
Conclusion
Infosys Ltd is currently navigating a challenging phase marked by increased bearish sentiment as evidenced by heavy put option trading activity. The concentration of put contracts near the current price ahead of the 25 August expiry reflects investor caution and hedging behaviour amid recent price declines and sector weakness. While the company’s fundamentals and dividend yield provide support, the technical and options market signals suggest that investors should remain vigilant in the near term.
