Infosys Sees Heavy Put Option Activity Amid Bearish Sentiment and Declining Momentum

Put Option Surge Highlights Investor Caution

On 30 December 2025, Infosys saw the most active put options concentrated at the ₹1,620 strike price, with 5,926 contracts traded. This volume translated into a turnover of approximately ₹3.56 lakhs, while open interest stood at 4,664 contracts, indicating sustained interest in downside protection or speculative bearish bets. The underlying stock price was ₹1,629.9 at the time, placing the ₹1,620 strike just below the current market level, a common choice for investors seeking to hedge against a moderate decline.

The heavy put option activity suggests that market participants are positioning for a possible near-term correction or increased volatility in Infosys shares. This is further corroborated by the stock’s recent price action, which has seen a consecutive five-day decline, resulting in a cumulative loss of 3.47% over this period.

Price Performance and Technical Context

Infosys has underperformed its sector by 0.5% on the day, with a 1-day return of -0.67%, compared to the sector’s -0.32% and the Sensex’s -0.16%. The stock’s price currently trades above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it remains below its 5-day moving average, reflecting short-term selling pressure.

Investor participation appears to be waning, as evidenced by a sharp 67.1% drop in delivery volume to 21.68 lakh shares on 29 December compared to the 5-day average. This decline in delivery volume may indicate reduced conviction among buyers, potentially amplifying downside risks in the near term.

Liquidity remains robust, with the stock’s traded value supporting trade sizes up to ₹27.94 crore based on 2% of the 5-day average traded value, ensuring that investors can execute sizeable trades without significant market impact.

Mojo Score Upgrade Reflects Long-Term Confidence

Despite the recent short-term weakness and bearish option positioning, Infosys retains a strong fundamental outlook. The company’s Mojo Score stands at 70.0, reflecting a Buy rating that was upgraded from Hold on 22 December 2025. This upgrade was driven by improved financial metrics and positive trend assessments, signalling confidence in the company’s medium to long-term prospects.

Infosys’s market capitalisation is substantial at ₹6,64,783 crore, categorising it as a large-cap stock with a Market Cap Grade of 1, underscoring its prominence and stability within the Computers - Software & Consulting sector.

Put Options as a Hedging and Speculative Tool

The concentration of put option activity at the ₹1,620 strike price with expiry on 30 December 2025 suggests that investors are either hedging existing long positions or speculating on a near-term decline. Open interest of 4,664 contracts indicates that these positions are not merely intraday trades but are being held with an expectation of price movement or risk mitigation over the coming days.

Given the stock’s recent five-day losing streak and underperformance relative to its sector, the put option interest aligns with a cautious market stance. Traders may be seeking downside protection against potential profit-taking or broader market volatility as the year-end approaches.

Sector and Market Context

The Computers - Software & Consulting sector has experienced mixed performance recently, with Infosys’s slight underperformance highlighting sector-specific challenges or stock-specific profit-taking. The Sensex’s modest decline of 0.16% on the day suggests that broader market conditions remain relatively stable, but sector rotation or profit booking could be influencing investor behaviour in large-cap IT stocks.

Infosys’s ability to maintain price levels above key moving averages despite short-term dips indicates underlying strength, but the current put option activity and falling delivery volumes warrant close monitoring for potential shifts in momentum.

Investor Takeaway and Outlook

For investors, the current landscape presents a nuanced picture. The strong Mojo Grade upgrade to Buy and the company’s large-cap status support a positive long-term view. However, the surge in put option activity and recent price weakness highlight short-term risks that could materialise as profit-taking or market volatility intensifies.

Traders with existing long exposure may consider protective strategies such as buying puts or tightening stop-loss levels to manage downside risk. Conversely, speculative investors might view the elevated put volumes as an opportunity to capitalise on potential near-term price corrections.

Monitoring open interest trends and expiry patterns in the coming days will be crucial to gauge whether bearish sentiment persists or if the stock stabilises and resumes its upward trajectory.

Summary

Infosys Ltd’s recent heavy put option trading at the ₹1,620 strike price ahead of the 30 December expiry reflects a cautious market stance amid a short-term downtrend. While the stock remains fundamentally strong with a Buy rating and robust market capitalisation, investors should remain vigilant to evolving price action and option market signals as year-end approaches.

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