Infosys Sees Heavy Put Option Activity as Investors Hedge Ahead of January Expiry

Put Option Surge at Key Strike Price

On 14 Jan 2026, Infosys recorded the most active put option contracts at the 1600 strike price, with 1,842 contracts traded. This surge in put options generated a turnover of ₹2.07 crores, reflecting heightened investor interest in downside protection or speculative bearish bets. The open interest at this strike stands at 4,679 contracts, indicating a substantial build-up of positions that could influence price dynamics as expiry approaches on 27 Jan 2026.

The underlying stock price hovered around ₹1600.6, almost at the strike price, which often acts as a psychological and technical pivot for option traders. The concentration of put options at this level suggests market participants are positioning for potential volatility or a correction in the near term.

Stock Performance and Technical Context

Despite the increased put activity, Infosys has demonstrated resilience in the broader market context. The stock outperformed its sector by 0.86% on the day, registering a 0.28% gain compared to the sector’s 0.55% decline and the Sensex’s marginal 0.02% drop. Over the last two trading sessions, Infosys has posted consecutive gains totalling 0.4%, signalling underlying strength.

Technically, the stock trades above its 50-day, 100-day, and 200-day moving averages, underscoring a long-term bullish trend. However, it remains below its shorter-term 5-day and 20-day moving averages, which may indicate some near-term consolidation or profit-taking. Rising delivery volumes, with 41.03 lakh shares delivered on 13 Jan—a rise of 18.38% over the five-day average—highlight growing investor participation and liquidity, supporting active trading interest.

Market Cap and Quality Assessment

Infosys commands a large market capitalisation of ₹6,47,916 crores, categorising it firmly as a large-cap stock with high liquidity and institutional interest. The company’s Mojo Score stands at 72.0, reflecting a strong Buy rating, an upgrade from Hold as of 22 Dec 2025. This upgrade signals improved fundamentals and positive outlook from MarketsMOJO’s proprietary grading system, which factors in financial metrics, trend assessments, and quality grades.

Interpreting the Put Option Activity

The heavy put option volume at the 1600 strike price, coupled with a sizeable open interest, suggests that investors are either hedging existing long positions or speculating on a potential downside move. Given the stock’s proximity to this strike price, the options market is pricing in a notable probability of price movement below this level by expiry.

Put options are often used as insurance against declines, and the current activity may reflect cautious sentiment amid broader market uncertainties or sector-specific headwinds. The Computers - Software & Consulting sector has faced mixed signals recently, with global tech valuations under pressure and domestic IT spending patterns evolving.

Expiry Patterns and Investor Behaviour

With expiry on 27 Jan 2026 approaching, the concentration of put contracts at 1600 could lead to increased volatility as traders adjust or unwind positions. Open interest levels indicate that a significant number of contracts remain outstanding, which may result in price pinning or sharp moves depending on how the underlying stock trades relative to the strike price.

Investors should monitor volume and price action closely in the coming days, as option expiry often triggers heightened trading activity and can reveal shifts in market sentiment.

Sector and Market Comparison

Infosys’s recent outperformance relative to its sector peers is notable. While the sector declined by 0.55% on the day, Infosys gained 0.28%, reflecting its relative strength. This divergence may explain why some investors are using puts to hedge against potential sector-wide weakness while maintaining exposure to Infosys’s individual prospects.

The Sensex’s near-flat performance (-0.02%) further highlights the stock’s resilience amid broader market fluctuations. Such dynamics often attract sophisticated investors who employ options strategies to balance risk and reward.

Investor Takeaways and Outlook

For investors, the current put option activity in Infosys offers both caution and opportunity. The stock’s strong fundamentals and upgraded Mojo Grade support a positive medium-term outlook, but the options market signals a degree of caution or hedging against near-term volatility.

Traders with bullish convictions might view the put buying as a contrarian indicator, while risk-averse investors may consider protective strategies to safeguard gains. Monitoring the evolving open interest and price action as expiry nears will be crucial for timely decision-making.

Overall, Infosys remains a key bellwether in the IT sector, and its option market activity provides valuable insights into investor sentiment and potential price trajectories in the weeks ahead.

Conclusion

Infosys Ltd’s heavy put option trading at the 1600 strike price ahead of the 27 Jan 2026 expiry highlights a nuanced market stance. While the stock continues to show technical strength and fundamental upgrades, the options market reveals a layer of hedging and bearish positioning. Investors should weigh these signals carefully, balancing the company’s robust profile against the potential for short-term volatility as expiry approaches.

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