Infosys Sees Heavy Put Option Activity Amid Bearish Sentiment Ahead of January Expiry

Put Option Activity Highlights

On 5 January 2026, Infosys recorded substantial volumes in put options, particularly at strike prices close to the current underlying value of ₹1,591. The most actively traded put contracts were at the ₹1,600 strike, with 4,327 contracts exchanged, generating a turnover of approximately ₹651.99 lakhs and an open interest of 3,163 contracts. This was closely followed by the ₹1,620 strike, which saw 2,880 contracts traded, turnover of ₹500.54 lakhs, and an open interest of 3,711 contracts. The ₹1,580 strike also attracted notable activity, with 2,443 contracts traded and turnover of ₹279.87 lakhs.

The concentration of put option trades at these strike prices, all near or slightly above the current market price, suggests that market participants are positioning for potential downside or are actively hedging existing long exposures. The open interest figures indicate that these positions are not merely speculative but may represent sustained bearish bets or protective strategies ahead of the expiry.

Stock Performance and Market Context

Infosys has recently experienced a reversal after two consecutive days of gains, with the stock declining by 2.79% on the day, underperforming its sector by 1.08% and the Sensex by 2.64%. The intraday low touched ₹1,593.9, down 2.83% from previous levels. Despite trading above its 50-day, 100-day, and 200-day moving averages, the stock remains below its 5-day and 20-day averages, indicating short-term weakness amid longer-term support.

Investor participation has also waned, with delivery volumes falling by nearly 50% compared to the five-day average, signalling reduced conviction among buyers. Liquidity remains adequate, with the stock capable of handling trade sizes up to ₹17.93 crores based on recent average traded values.

Mojo Score Upgrade and Market Implications

MarketsMOJO recently upgraded Infosys from a Hold to a Buy rating on 22 December 2025, reflecting improved fundamentals and positive medium-term prospects. The company holds a Mojo Score of 70.0, indicating favourable momentum and quality metrics. However, the market’s current put option activity and price action suggest that investors remain cautious in the short term, possibly awaiting clearer signals on earnings or broader market trends.

Infosys’s market capitalisation stands at a robust ₹6,65,229 crores, categorising it firmly as a large-cap stock within the Computers - Software & Consulting sector. This size and sector leadership typically attract institutional interest, which may explain the active use of options for hedging purposes amid recent volatility.

Expiry Patterns and Investor Strategies

The 27 January 2026 expiry date is attracting the bulk of put option activity, with strike prices clustered around ₹1,580 to ₹1,620. This range encompasses the current trading price, suggesting that investors are preparing for potential downside scenarios or are seeking to protect gains from recent rallies. The elevated open interest at these strikes indicates that these positions are likely to influence price dynamics as expiry approaches.

Such concentrated put buying can also reflect a hedging strategy by institutional investors who may hold sizeable long positions in Infosys shares. By purchasing puts, they limit downside risk while maintaining upside exposure. Alternatively, speculative traders might be betting on a near-term correction given the stock’s recent underperformance relative to its sector and the broader market.

Sector and Market Comparison

Infosys’s 1-day return of -2.79% contrasts with the sector’s decline of -1.83% and the Sensex’s marginal fall of -0.15%, underscoring the stock’s relative weakness. This divergence may be driving the increased put option interest as investors seek protection or capitalise on anticipated volatility. The Computers - Software & Consulting sector remains competitive, with Infosys facing pressure from peers and global macroeconomic uncertainties impacting IT spending.

Investor Takeaways

For investors, the heavy put option activity in Infosys signals a cautious near-term outlook despite the company’s strong fundamentals and recent rating upgrade. The clustering of put contracts near the current price suggests that downside protection is a priority, possibly reflecting concerns over upcoming earnings, global IT demand, or broader market volatility.

Long-term investors may view the current weakness as a buying opportunity, given Infosys’s leadership position and favourable Mojo Score. However, traders should monitor option open interest and price action closely as the 27 January expiry approaches, as these factors could precipitate increased volatility.

In summary, while Infosys remains a Buy-rated large-cap with solid fundamentals, the options market reveals a nuanced picture of investor sentiment, blending optimism with prudent risk management.

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