Infosys Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity and Market Context

On 4 December 2025, Infosys Ltd (INFY) recorded the highest volume of put option contracts traded, with 1,685 contracts changing hands for the expiry dated 30 December 2025. The strike price attracting the most attention was ₹1,580, closely aligned with the underlying stock price of ₹1,585.7. This level of activity generated a turnover of approximately ₹170.185 lakhs, accompanied by an open interest of 1,837 contracts, indicating sustained investor interest in downside protection or speculative bearish bets.

The put option volume and open interest figures suggest that market participants are positioning for potential volatility or downside risk in the near term. The strike price chosen is marginally below the current market price, which may reflect hedging strategies to guard against a moderate decline or a tactical stance anticipating a pullback.

Stock Performance and Technical Indicators

Infosys has been trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a generally bullish technical backdrop. The stock has recorded gains over the last two consecutive days, delivering a cumulative return of 1.34% during this period. However, on the day of analysis, Infosys underperformed its sector by 0.58%, with a modest 0.16% increase compared to the sector’s 1.10% gain and the Sensex’s 0.10% rise.

Investor participation has shown a marked increase, with delivery volume on 3 December reaching 85.45 lakhs, representing a 125.9% rise compared to the five-day average delivery volume. This heightened activity underscores growing interest in the stock, possibly reflecting both accumulation and hedging behaviours.

Liquidity and Market Capitalisation

Infosys, a large-cap company with a market capitalisation of ₹6,55,724 crores, maintains sufficient liquidity to support sizeable trades. Based on 2% of the five-day average traded value, the stock can accommodate trade sizes up to ₹24.21 crores without significant market impact. This liquidity profile supports active options trading and facilitates the execution of complex hedging strategies.

Implications of Put Option Concentration

The concentration of put options at the ₹1,580 strike price for the December expiry suggests that investors are actively seeking downside protection close to the current market level. This pattern often indicates a cautious market sentiment or a hedging approach to mitigate potential losses in the event of a price correction.

Put options serve as insurance for long stock positions or as speculative instruments to capitalise on anticipated declines. The open interest of 1,837 contracts at this strike price reflects a meaningful commitment of capital towards such strategies. Given the proximity of the strike price to the underlying value, the put options are likely to be influential in price discovery and volatility expectations as expiry nears.

Expiry Patterns and Investor Behaviour

The December 2025 expiry is a critical juncture for Infosys options traders. The volume and open interest data indicate that market participants are positioning ahead of this date, possibly in response to upcoming corporate events, earnings announcements, or broader market conditions affecting the technology sector.

Infosys operates within the Computers - Software & Consulting industry, a sector that has experienced varied performance amid global economic shifts and technological advancements. The stock’s recent trading above all major moving averages suggests underlying strength, yet the active put option interest points to a segment of investors preparing for potential volatility or downside risk.

Sector and Market Comparison

While Infosys has shown resilience relative to the broader sector and benchmark indices, the put option activity contrasts with the stock’s technical strength. The sector recorded a 1.10% gain on the day, outpacing Infosys’s 0.16% return, which may have prompted some investors to hedge their exposure or express caution through options.

The Sensex’s modest 0.10% increase on the same day further contextualises the market environment as one of cautious optimism, where selective hedging strategies are prudent. This dynamic is reflected in the options market, where put contracts serve as a barometer of investor sentiment and risk management.

Investor Takeaways and Outlook

Investors tracking Infosys should note the significant put option activity as an indicator of hedging or cautious positioning ahead of the December expiry. While the stock’s technical indicators remain positive, the options market reveals a nuanced sentiment that balances optimism with risk management.

Market participants may consider monitoring open interest and volume trends in the coming weeks to gauge shifts in sentiment and potential volatility. The strike price of ₹1,580 will be a key level to watch, as it represents a focal point for downside protection and speculative interest.

Given Infosys’s large-cap status and liquidity, the stock remains a central player in the Computers - Software & Consulting sector, attracting diverse investor strategies ranging from accumulation to hedging. The interplay between stock performance and options market activity offers valuable insights for portfolio management and risk assessment.

Conclusion

Infosys’s prominence in put option trading ahead of the December 2025 expiry underscores the importance of options as a tool for managing market uncertainty. The concentration of activity at the ₹1,580 strike price, combined with the stock’s recent price action and sector context, paints a picture of a market balancing growth prospects with prudent risk controls.

Investors and analysts alike should continue to observe both the underlying stock trends and the evolving options landscape to better understand the market’s expectations and prepare for potential price movements in the near term.

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