Rs 1,070 Puts — 3.6% Below Current Price — Draw 2,524 Contracts on Infosys Ltd

Put Options Event and Cash Market Context

On 28 July 2026, Infosys Ltd saw significant put option activity clustered around strikes Rs 1,070, Rs 1,080, Rs 1,090, and Rs 1,095. The Rs 1,070 puts recorded 2,524 contracts traded with an open interest of 2,377, while the Rs 1,080 strike saw 3,196 contracts traded and a higher open interest of 3,222. The Rs 1,090 and Rs 1,095 strikes also witnessed heavy turnover, with 3,394 and 3,135 contracts traded respectively. The underlying stock price stood at Rs 1,111.10, marking a 3.10% gain on the day and a 6.77% rise over the past two sessions.

This surge in put activity coincides with a stock that has been outperforming its sector, which gained 2.93% on the day. The IT - Software sector's positive momentum contrasts with the heavy put interest, raising the question: is this put activity a hedge against recent gains or a signal of bearish conviction?

Strike Price Analysis: Moneyness and Intent

The Rs 1,070 strike sits approximately 3.6% below the current market price, categorising these puts as out-of-the-money (OTM). Similarly, the Rs 1,080 and Rs 1,090 strikes are 2.9% and 2.0% below the underlying price respectively, while the Rs 1,095 strike is just 1.5% below. The proximity of these strikes to the current price suggests that the put buyers are not expecting an immediate sharp decline but are positioning for a moderate pullback or protection against volatility.

OTM puts bought on a rising stock often indicate hedging activity, where investors seek to protect unrealised gains rather than express outright bearishness. Conversely, if these puts were deep in-the-money (ITM) or at-the-money (ATM) and the stock was falling, the interpretation would lean more towards directional bearish bets. The current strike distances combined with the stock’s recent rally point towards a protective stance rather than a directional bet.

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

The put activity on Infosys Ltd can be read in multiple ways. First, the OTM nature of the strikes and the stock’s upward momentum suggest hedging by long holders seeking insurance against a pullback. Second, the possibility of put writing cannot be ignored, especially given the sizeable open interest at these strikes. Put sellers collect premium betting the stock will stay above these levels, implying a bullish or neutral outlook.

However, the turnover and open interest ratios indicate fresh positioning rather than just rollovers or adjustments. For example, the Rs 1,080 strike shows 3,196 contracts traded against an open interest of 3,222, a near 1:1 ratio, signalling new activity. This fresh demand for puts at OTM strikes during a rally aligns more with hedging than bearish speculation. Could this be a sign that investors are cautious despite the recent gains?

Open Interest and Contracts Analysis

The open interest (OI) at the Rs 1,100 strike for the 25 August 2026 expiry stands out with 6,228 contracts, while 4,037 contracts traded on 28 July 2026. This strike is closer to the current price and has a longer expiry, indicating a more strategic hedge or position. The OI at the nearer expiry strikes (Rs 1,070 to Rs 1,095) ranges between 2,161 and 3,222, with traded contracts often matching or exceeding OI, suggesting fresh buying rather than just position unwinding.

Such fresh put buying at OTM strikes with rising underlying prices typically reflects a desire to protect gains rather than a conviction that the stock will fall sharply. The relatively balanced OI and turnover ratios also reduce the likelihood of aggressive put writing, which usually features high OI with comparatively low daily volume.

Cash Market Context: Momentum and Moving Averages

Infosys Ltd has gained 6.77% over the past two days, outperforming its sector by 0.3%. The stock trades above its 5-day and 20-day moving averages but remains below the 50-day, 100-day, and 200-day averages. This technical setup suggests short-term strength amid longer-term consolidation. The Rs 1,070 put strike roughly aligns with a support zone below the 50-day moving average, consistent with a protective hedge against a potential pullback to this technical level.

Delivery volumes rose 25.35% on 27 July to 98.08 lakh shares, signalling increased investor participation. However, the rally’s delivery-backed conviction remains moderate, which may explain why investors are seeking downside protection through puts. Is this cautious positioning a prudent response to mixed technical signals?

Fundamental and Market Positioning Brief

Infosys Ltd remains a large-cap leader in the Computers - Software & Consulting sector with a market capitalisation of Rs 4,37,833 crore. The stock offers a dividend yield of 4.5%, adding to its appeal for long-term investors. The current put activity does not reflect fundamental deterioration but rather a tactical response to recent price gains and technical resistance levels.

Conclusion: Protective Hedging Dominates Put Activity

The heavy put option activity on Infosys Ltd at strikes 3-4% below the current price, combined with the stock’s recent rally and technical positioning, points primarily to hedging rather than outright bearish bets. The fresh buying of OTM puts near key support levels suggests investors are seeking insurance against a pullback rather than expecting a sharp decline. While put writing remains a possibility, the turnover and open interest patterns do not strongly support this interpretation.

Given the stock’s position above short-term moving averages but below longer-term ones, the put strikes align with a technical hedge zone. Delivery volume trends and sector outperformance further reinforce the view that the put activity is a cautious, protective measure. Should investors consider similar protective strategies or interpret this as a sign of underlying strength?

Key Data at a Glance

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