Heavy Put Option Volumes Concentrated Near Current Market Price
On 12 May 2026, Infosys (INFY) recorded significant put option activity with the most active strikes clustered between ₹1100 and ₹1150, close to the underlying stock price of ₹1137.5. The highest volume was seen at the ₹1140 strike, where 6,685 contracts traded, generating a turnover of ₹7.54 crores. This was closely followed by the ₹1130 strike with 4,870 contracts and ₹1100 strike with 4,888 contracts traded.
The ₹1120 strike also attracted substantial interest, with 3,305 contracts changing hands, while the ₹1150 strike saw 2,491 contracts traded. Open interest figures corroborate this concentration, with the ₹1100 strike holding the largest open interest of 4,879 contracts, indicating sustained bearish bets or hedges at this level.
Expiry Patterns and Market Implications
All these put options are set to expire on 26 May 2026, less than two weeks away, suggesting that traders are positioning for near-term downside risk or protection against further declines. The clustering of open interest and volume near the current price implies that investors are wary of a potential drop below ₹1100-₹1150 in the coming days.
This pattern is consistent with the stock’s recent technical deterioration. Infosys has breached multiple moving averages, trading below its 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a bearish trend. The stock hit a new 52-week low of ₹1133.1 on the day, underscoring the negative momentum.
Stock Performance and Sector Context
Infosys has underperformed its sector and the broader market recently. The stock declined by 3.70% on 12 May 2026, underperforming the IT - Software sector’s fall of 2.93% and the Sensex’s modest 0.70% drop. Over the last two trading sessions, Infosys has lost 3.43% in value, reflecting sustained selling pressure.
Investor participation has also waned, with delivery volumes falling by 8.47% compared to the five-day average, indicating reduced conviction among buyers. Despite this, the stock maintains a relatively attractive dividend yield of 3.92%, which may provide some support to long-term holders.
Mojo Score Upgrade Reflects Mixed Sentiment
Market analytics provider MarketsMOJO recently upgraded Infosys’s mojo grade from Sell to Hold on 13 April 2026, assigning a mojo score of 57.0. This suggests a cautious stance, recognising the stock’s large-cap status and fundamental strength in the Computers - Software & Consulting sector, but also acknowledging the current technical weakness and bearish sentiment reflected in option markets.
Investor Strategies: Hedging and Bearish Positioning
The surge in put option volumes and open interest at strikes near the current price indicates that investors are actively hedging existing long positions or speculating on further downside. Put options provide a cost-effective way to protect portfolios against declines or to profit from bearish moves without outright short selling.
Given the proximity of strike prices to the underlying value, these options are likely being used as near-the-money hedges. The high turnover in these contracts, amounting to over ₹23 crores cumulatively across the top five strikes, highlights the intensity of this activity.
Outlook and Considerations for Investors
While the technical indicators and option market activity point to near-term caution, investors should weigh these signals against Infosys’s strong market position and dividend yield. The stock’s large-cap status and presence in a vital sector provide a degree of resilience, but the current downtrend and bearish option positioning warrant close monitoring.
Traders may consider the expiry date of 26 May 2026 as a critical juncture, with the potential for increased volatility as positions are squared off or rolled forward. Those holding long positions might look to protective puts or stop-loss strategies, while bearish investors could capitalise on the momentum through put options or short positions.
Summary
Infosys Ltd’s recent put option activity reveals a market bracing for further downside risk in the short term. The concentration of put volumes and open interest near the ₹1100-₹1150 strikes ahead of the 26 May expiry, combined with the stock’s technical weakness and sector underperformance, underscores a cautious investor sentiment. While the mojo grade upgrade to Hold reflects some fundamental confidence, the prevailing market dynamics suggest that hedging and bearish positioning will remain prominent themes for Infosys in the coming weeks.
