Rs 1,020 Puts — Just Below Current Price — Draw 2,681 Contracts on Infosys Ltd

Put Options Event and Cash Market Context

On 23 Sep 2026, Infosys Ltd saw 2,681 put contracts traded at the Rs 1,020 strike, generating a turnover of approximately ₹121.07 lakhs. The open interest at this strike stands at 4,924 contracts, indicating a substantial existing position. The expiry date for these options is 29 Sep 2026, just six days away, which adds urgency to the positioning. Meanwhile, the stock closed at Rs 1,023.90, hovering just above the put strike price.

The stock has been on a downward trajectory, falling nearly 4.94% over the past six sessions and underperforming its sector by 0.28% today. It is trading close to its 52-week low, just 4.04% above Rs 982.40, and remains below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling persistent bearish momentum. Delivery volumes have also declined by 7.44% against the five-day average, suggesting waning investor participation in the cash market. Infosys Ltd’s high dividend yield of 4.71% offers some income cushion, but the technical picture remains subdued. Is this put activity a sign of growing conviction in a further decline, or a tactical hedge against recent losses?

Strike Price Analysis: Moneyness and Intent

The Rs 1,020 put strike is effectively at-the-money (ATM), being only 0.3% below the current stock price of Rs 1,023.90. This proximity is critical in interpreting the intent behind the put contracts. ATM puts are often purchased either as a direct bearish bet anticipating a near-term decline or as a protective hedge to limit downside risk on existing long positions.

Given the stock’s recent six-day slide and its position below all major moving averages, the Rs 1,020 strike aligns closely with a technical support zone. This suggests that some investors may be seeking downside protection against further falls, while others could be positioning for a continuation of the downtrend. The short time to expiry intensifies the focus on near-term price moves, making these puts a tactical instrument rather than a long-term hedge. Are traders betting on a further dip or simply guarding against volatility in the final days before expiry?

Interpreting the Put Activity: Bearish, Hedging, or Put Writing?

Put option activity can be ambiguous. The three main interpretations here are: directional bearish positioning (put buying), protective hedging of existing longs, or put writing (selling puts to collect premium, implying bullish or neutral outlook).

In this case, the large number of contracts traded (2,681) relative to the open interest (4,924) suggests significant fresh activity, but not an overwhelming surge. The stock’s consistent decline and position below all moving averages support the view that the put buying is likely directional bearish or protective hedging rather than put writing. Put writing typically involves selling out-of-the-money (OTM) puts to collect premium, which is less likely here given the strike is ATM and the stock is falling.

Moreover, the turnover of ₹121.07 lakhs indicates meaningful premium paid, consistent with put buying rather than premium collection. The proximity to expiry further supports the idea that these puts are being acquired to either capitalise on expected near-term weakness or to protect existing holdings from further downside. Could this be a sign of cautious positioning ahead of the expiry, or a more confident bearish stance?

Open Interest and Contracts Analysis

The open interest of 4,924 contracts at the Rs 1,020 strike is substantial, indicating that this strike has been a focal point for put activity over recent sessions. The ratio of contracts traded to open interest on 23 Sep is approximately 0.54, suggesting that while fresh positions were added, a significant portion of the open interest is from existing holders. This mix points to both new bearish bets and ongoing hedging strategies.

Given the stock’s recent downtrend, some investors may be layering protection while others are initiating fresh bearish positions. The relatively high open interest also implies that the strike price is a key technical level watched by market participants. The expiry proximity means that these positions will likely be adjusted or closed soon, depending on the stock’s price action in the coming days.

Cash Market Context: Momentum, Moving Averages, and Delivery Volumes

Infosys Ltd’s stock price has been steadily declining, losing 4.94% over six consecutive sessions. It trades below all key moving averages, signalling a bearish technical setup. The Rs 1,020 put strike is close to the current price and near a potential support level, which may explain the concentration of put activity there.

Delivery volumes have dropped by 7.44% compared to the five-day average, indicating reduced investor participation in the cash market. This thinning volume could be a factor behind the put buying, as investors seek downside protection amid a rally that lacks strong delivery-backed conviction. Is the market bracing for a deeper correction, or is this a tactical hedge against short-term volatility?

Key Data at a Glance

Conclusion: Most Likely Interpretation of Put Activity

The concentration of put contracts at the Rs 1,020 strike, just below the current price of Rs 1,023.90, combined with the stock’s sustained decline and position below all major moving averages, points to a predominantly bearish or protective stance among market participants. The sizeable turnover and open interest suggest a mix of fresh bearish bets and hedging of existing long positions rather than put writing, which would typically involve OTM strikes and premium collection.

Given the proximity to expiry and the technical context, the put activity likely reflects a cautious market bracing for further downside or guarding against volatility in the near term. The declining delivery volumes reinforce the notion that the rally lacks conviction, prompting investors to seek downside protection. Should investors interpret this as a signal to hedge their positions or as a warning of deeper weakness ahead?

Options carry risk and are not suitable for all investors. The analysis above is based on available data and does not constitute investment advice.

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