Infosys Sees Surge in Put Option Activity Ahead of March Expiry

Put Option Activity Highlights

Data from the options market reveals that Infosys put options expiring on 30 March 2026 have seen robust trading volumes and open interest, particularly at strike prices ranging from ₹1,220 to ₹1,320. The underlying stock closed recently at ₹1,305.4, placing these strikes close to the money and reflecting heightened investor focus on this price band.

The most actively traded put option was at the ₹1,320 strike, with 3,212 contracts changing hands and a turnover of ₹6.22 crores. Open interest at this strike stands at 1,710 contracts, suggesting sustained interest in downside protection or speculative bearish bets.

Close behind, the ₹1,280 strike saw 2,619 contracts traded with a turnover of ₹3.36 crores and an open interest of 3,680 contracts, the highest among the strikes analysed. This elevated open interest indicates that many investors are either hedging against a potential decline below this level or speculating on a price drop.

Other notable strikes include ₹1,260 with 1,943 contracts traded (turnover ₹1.99 crores, open interest 2,063) and ₹1,240 with 1,612 contracts traded (turnover ₹1.37 crores, open interest 2,562). The ₹1,220 strike also attracted significant activity with 1,601 contracts traded and an open interest of 1,548.

Market Context and Price Action

Infosys’s recent price action provides context to this put option activity. The stock is trading approximately 3.17% above its 52-week low of ₹1,264.1, signalling that it is near a significant support zone. Despite opening the day with a gap-up of 2.89%, the stock remains below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a prevailing downtrend across multiple timeframes.

Investor participation appears to be waning, with delivery volumes on 26 February falling by 47.63% compared to the five-day average, suggesting cautious sentiment. However, the stock maintains a relatively high dividend yield of 3.58%, which may provide some support to long-term holders.

Liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹44.89 crores, ensuring that option and stock trades can be executed without significant market impact.

Investor Positioning and Hedging Implications

The concentration of put option activity near and slightly below the current market price suggests that investors are either hedging against a potential correction or speculating on a decline in Infosys shares. The highest open interest at the ₹1,280 strike, combined with substantial turnover, points to this level as a critical support zone in the near term.

Given the stock’s recent downgrade from a Buy to a Hold rating on 9 February 2026, with a Mojo Score of 57.0, market participants may be adjusting their portfolios accordingly. The downgrade reflects a more cautious outlook amid sectoral headwinds and the stock’s inability to sustain levels above key moving averages.

Put options serve as an effective tool for portfolio protection, especially in large-cap stocks like Infosys, which boasts a market capitalisation of ₹5,22,882 crores. The sizeable open interest and turnover in puts indicate that institutional investors and traders are actively managing risk ahead of the March expiry.

Comparative Sector and Market Performance

Infosys’s one-day return of 1.28% outperformed the sector’s 0.71% gain and the broader Sensex’s decline of 0.54%, reflecting relative resilience despite bearish option positioning. However, the stock’s inability to break above its moving averages and the falling delivery volumes suggest that this outperformance may be short-lived without fresh catalysts.

Investors should monitor the expiry dynamics closely, as heavy put option activity can lead to increased volatility around strike prices with significant open interest. The March expiry could see price action gravitate towards the ₹1,280 to ₹1,320 range, where the bulk of put contracts are concentrated.

Outlook and Investor Takeaways

While Infosys remains a heavyweight in the software and consulting sector, the current option market activity signals caution. The heavy put option volumes and open interest near the ₹1,280 to ₹1,320 strikes suggest that investors are bracing for potential downside or are actively hedging existing positions.

Investors should weigh the stock’s attractive dividend yield of 3.58% against the technical weakness and bearish sentiment reflected in the options market. The downgrade to a Hold rating and the stock’s position below key moving averages further reinforce the need for prudence.

Traders may consider monitoring open interest changes and price action around the March expiry to gauge whether the bearish positioning translates into actual price declines or if the stock stabilises near current levels. Given the stock’s liquidity and market cap, any significant moves could present trading opportunities for both directional and hedging strategies.

In summary, the surge in put option activity on Infosys ahead of the 30 March expiry highlights a market environment where investors are increasingly cautious, favouring downside protection amid uncertain near-term prospects.

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