Infosys Sees Heavy Put Option Activity Amid Steady Gains and Narrow Trading Range

Put Option Activity Highlights

On 5 December 2025, Infosys recorded a total of 3,018 put option contracts traded at the 1600 strike price, generating a turnover of approximately ₹2.77 crores. The open interest for these contracts stands at 5,625, indicating a substantial volume of outstanding positions that market participants are holding as the expiry date approaches. The underlying stock price at the time was ₹1,611.30, placing the 1600 strike price just below the current market value, which suggests that investors may be positioning for potential downside protection or speculative bearish bets.

Stock Performance and Market Context

Infosys has demonstrated resilience in recent sessions, outperforming its sector by 0.42% on the day and registering a 0.79% gain compared to the sector’s 0.43% and the Sensex’s 0.04% returns. The stock has been on a three-day consecutive gain streak, accumulating a 3.08% return during this period. Despite this positive momentum, the stock has traded within a narrow range of ₹12.7, reflecting a consolidation phase where price fluctuations remain limited.

Technical indicators show that Infosys is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a generally bullish trend over multiple time frames. Additionally, investor participation has risen notably, with delivery volumes reaching 86.24 lakh shares on 4 December, marking an 88.88% increase compared to the five-day average delivery volume. This heightened activity underscores growing interest and liquidity in the stock, which is further supported by a traded value sufficient to accommodate trade sizes of up to ₹27.93 crores based on 2% of the five-day average traded value.

Implications of Put Option Concentration

The concentration of put option activity at the 1600 strike price with expiry at the end of December suggests that market participants are either hedging existing long positions or speculating on a potential correction in the near term. Given that the strike price is slightly below the current market price, these puts could serve as a protective measure against downside risk, especially as the year-end approaches and investors reassess portfolio allocations.

Open interest levels provide insight into the persistence of these positions. The sizeable open interest of 5,625 contracts indicates that many traders have maintained their bearish or hedging stances rather than closing out positions. This sustained interest could reflect caution amid broader market uncertainties or sector-specific factors affecting the Computers - Software & Consulting industry.

Sector and Market Capitalisation Context

Infosys operates within the Computers - Software & Consulting sector and holds a large-cap market capitalisation of approximately ₹6,63,826 crores. Its performance relative to the sector and benchmark indices highlights its role as a bellwether stock within the technology space. The stock’s ability to maintain gains while exhibiting a narrow trading range may indicate a phase of consolidation before a potential directional move, which market participants appear to be preparing for through options positioning.

Technical and Liquidity Considerations

Trading above all major moving averages suggests that the stock remains in an overall upward trend, which may temper bearish sentiment despite the heavy put option activity. The sharp rise in delivery volumes points to increased investor conviction and participation, which can provide support to the stock price. Moreover, the liquidity metrics confirm that the stock can absorb sizeable trades without significant price disruption, an important factor for institutional investors and traders managing large positions.

Expiry Patterns and Investor Behaviour

The expiry date of 30 December 2025 for the most active put options coincides with the end of the calendar year, a period often marked by portfolio rebalancing and strategic positioning. Investors may be using these options to hedge against potential volatility arising from macroeconomic developments, earnings announcements, or geopolitical events expected in the coming weeks.

Such expiry patterns are typical in large-cap stocks where institutional investors seek to manage risk while maintaining exposure to potential upside. The presence of significant open interest at a strike price close to the current market value further emphasises the cautious stance adopted by market participants, balancing optimism from recent gains with prudence against unforeseen downturns.

Conclusion: Navigating Mixed Signals

Infosys presents a nuanced picture for investors and traders. The stock’s recent outperformance relative to its sector and the Sensex, combined with its position above key moving averages, suggests underlying strength. However, the heavy put option activity at a strike price just below the current market level indicates that a segment of the market is preparing for possible downside or seeking protection against volatility.

For market participants, this duality calls for careful analysis of broader market trends, sector developments, and company-specific news. The liquidity and rising investor participation provide a supportive backdrop for the stock, but the options data highlights the importance of monitoring risk management strategies as the December expiry approaches.

Investors should consider these factors in the context of their portfolio objectives and risk tolerance, recognising that the interplay between steady gains and significant put option interest reflects a market balancing optimism with caution.

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