Rs 1,100 Puts — 2.2% Below Current Price — Draw 5,115 Contracts on Infosys Ltd

Put Options Event and Cash Market Context

The most active put strikes for Infosys Ltd on 15 May were Rs 1,100 and Rs 1,080, with 5,115 and 4,398 contracts traded respectively, ahead of the 26 May 2026 expiry. The Rs 1,100 strike commands the highest open interest at 4,816 contracts, indicating a well-established position. The turnover for these puts was substantial, with Rs 252.68 lakhs for the Rs 1,100 strike and Rs 130.18 lakhs for Rs 1,080. Meanwhile, the stock closed at Rs 1,125.50, having gained 3.21% on the day and outperforming its sector by 0.75%.

This combination of heavy put activity and a rising stock price raises the question: is this hedging, a bearish bet, or put writing? The answer lies in the strike price positioning and the broader market context.

Strike Price Analysis: Moneyness and Intent

The Rs 1,100 strike sits approximately 2.2% out-of-the-money (OTM) relative to the underlying price of Rs 1,125.50, while the Rs 1,080 strike is about 4.1% OTM. Typically, OTM puts bought on a rising stock are interpreted as protective hedges, shielding gains from a potential pullback rather than outright bearish bets. In contrast, at-the-money (ATM) or in-the-money (ITM) puts would more strongly suggest directional bearish positioning.

Given the stock’s recent rally after four consecutive days of decline, the OTM put strikes align with a strategy to guard against short-term volatility rather than anticipating a sharp decline. The Rs 1,080 strike, being further OTM, may also attract put writing activity, where sellers collect premium expecting the stock to remain above that level by expiry.

Interpreting the Put Activity: Multiple Perspectives

Put option activity can be ambiguous. The three main interpretations are: put buying as a bearish bet, hedging of existing long positions, or put writing as a bullish income strategy. For Infosys Ltd, the data suggests a blend of hedging and put writing rather than outright bearish conviction.

The stock’s 3.21% gain on the day and recent trend reversal after a four-day slide support the hedging thesis. Investors who have accumulated shares during the dip may be buying OTM puts to protect profits without exiting positions. Meanwhile, the sizeable open interest at Rs 1,100 and Rs 1,080 strikes, combined with high turnover, indicates active premium collection, consistent with put writing strategies that profit if the stock remains above these levels.

This dual reading is reinforced by the fact that the stock remains below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, suggesting technical resistance overhead. The Rs 1,100 strike roughly corresponds to a support zone near recent lows, making it a logical hedge point rather than a speculative short bet. Could this positioning reflect cautious optimism rather than outright bearishness?

Open Interest and Contracts: Fresh Positioning or Adjustments?

The ratio of contracts traded to open interest offers insight into whether the activity represents fresh positioning or adjustments to existing bets. For the Rs 1,100 strike, 5,115 contracts traded against an open interest of 4,816, yielding a ratio slightly above 1:1. This suggests a mix of new positions and rollovers rather than purely fresh bets.

At Rs 1,080, the ratio is more pronounced with 4,398 contracts traded versus 1,905 open interest, indicating significant fresh activity. This could reflect put writing or new hedging demand. The sizeable turnover in both strikes underscores active participation in the put market, but the open interest levels imply that much of this is not purely speculative bearish positioning but also includes protective and income strategies.

Cash Market Context: Technicals and Delivery Volumes

Infosys Ltd is trading below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day, indicating that the stock remains in a broader downtrend despite the recent bounce. However, the stock is only 3.2% above its 52-week low of Rs 1,089, suggesting proximity to a key support zone.

Delivery volumes on 14 May rose sharply by 73.14% to 1 crore shares, signalling increased investor participation during the recent rally. Yet, the rally’s lack of sustained movement above moving averages and the thinning delivery participation on the day of heavy put activity may explain why investors are seeking downside protection. Is this a sign that the rally lacks conviction and investors are preparing for potential volatility?

Conclusion: Protective Hedging and Put Writing Dominate

The heavy put option activity in Infosys Ltd at strikes Rs 1,100 and Rs 1,080, combined with the stock’s recent rally and technical positioning, points primarily to hedging and put writing rather than outright bearish bets. The OTM nature of the puts, the proximity to support levels, and the mixed open interest ratios support this interpretation.

Investors appear to be protecting gains from the recent bounce while also collecting premium through put writing, reflecting cautious optimism amid a still fragile technical backdrop. The stock’s position below all major moving averages and near its 52-week low adds complexity to the picture, but the data suggests that the put activity is more about managing risk than signalling a sharp decline.

With puts active and calls also seeing interest, should investors be hedging their positions in Infosys or is the rally poised for continuation?

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