Put Option Activity Highlights
On 23 January 2026, Mphasis Ltd emerged as the most active stock in put options trading, with the 2700 strike price put contracts dominating volumes. A total of 6,955 contracts were traded, generating a turnover of approximately ₹359.19 lakhs. The open interest at this strike stands at 714 contracts, indicating sustained investor interest in downside protection or speculative bearish bets.
The underlying stock price at the time was ₹2740.20, hovering just above the 2700 strike, which suggests that traders are positioning for a potential decline below this level by the expiry date. The expiry on 27 January 2026 is imminent, adding urgency to these trades as market participants seek to hedge or capitalise on expected near-term volatility.
Price Performance and Market Context
Mphasis Ltd’s share price has underperformed its sector and broader market indices in recent sessions. On 22 January, the stock closed with a 2.02% loss, underperforming the Computers - Software & Consulting sector by 2.8% and the Sensex by 1.74%. The stock’s intraday range on the same day was between ₹2735.40 and ₹2879, with the weighted average price skewed towards the lower end, reflecting selling pressure.
Technical indicators reveal a mixed picture. The stock trades above its 200-day moving average, a long-term bullish signal, but remains below its 5-day, 20-day, 50-day, and 100-day moving averages, indicating short- to medium-term weakness. This divergence suggests that while the long-term trend may still be intact, immediate momentum is faltering.
Investor participation has also waned, with delivery volumes on 22 January falling sharply by 64.85% compared to the five-day average. This decline in committed buying interest may be contributing to the increased demand for put options as investors seek downside protection amid uncertain sentiment.
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Mojo Score and Analyst Ratings
Mphasis Ltd currently holds a mojo score of 60.0, categorised as a 'Hold' rating, following a downgrade from 'Buy' on 19 January 2026. This adjustment reflects a reassessment of the company’s near-term prospects amid sectoral headwinds and recent price weakness. The market capitalisation stands at ₹52,678 crores, placing it firmly in the mid-cap segment with a market cap grade of 2.
The downgrade signals a more cautious stance from analysts, who may be factoring in increased competition, margin pressures, or macroeconomic uncertainties impacting the software and consulting industry. Investors should weigh these considerations alongside technical signals and option market activity when forming their outlook.
Implications of Heavy Put Option Trading
The concentration of put option volume at the 2700 strike price, just below the current market price, suggests that traders are either hedging existing long positions or speculating on a near-term decline. The sizeable turnover and open interest indicate that this is not a fleeting trend but a significant positioning move.
Such activity often precedes increased volatility, as option sellers hedge their exposure and buyers seek protection against downside risks. The expiry date being less than a week away adds to the potential for price swings as traders adjust their positions.
Investors should monitor the stock’s price action closely in the coming days, particularly around the 2700 level, as a breach could trigger further downside momentum. Conversely, a rebound above short-term moving averages might alleviate bearish pressures and reduce put option demand.
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Sector and Market Comparison
While Mphasis Ltd has declined by 2.43% in a single day, the Computers - Software & Consulting sector has managed a modest gain of 0.20%, and the Sensex has slipped marginally by 0.28%. This relative underperformance highlights company-specific challenges or investor concerns not fully reflected in the broader sector.
Liquidity remains adequate, with the stock’s traded value supporting transactions up to ₹4.55 crores based on 2% of the five-day average traded value. This ensures that option market activity is supported by a sufficiently liquid underlying, reducing the risk of price distortions due to thin trading.
Investors should also consider the broader macroeconomic environment, including global technology demand, currency fluctuations, and regulatory developments, which could influence Mphasis’s performance and investor sentiment going forward.
Outlook and Investor Considerations
The surge in put option activity at the 2700 strike price ahead of the 27 January expiry signals a cautious or bearish stance among market participants. Combined with the recent downgrade in mojo grade and technical weakness, this suggests that investors are bracing for potential near-term headwinds.
However, the stock’s position above the 200-day moving average and its sizeable market capitalisation provide some support for a longer-term recovery. Investors with a medium- to long-term horizon may view current weakness as an opportunity to accumulate selectively, while short-term traders should remain vigilant for volatility spikes.
Careful monitoring of option open interest changes, volume patterns, and price action around key technical levels will be crucial in navigating the evolving landscape for Mphasis Ltd.
Summary
Mphasis Ltd’s recent put option surge reflects growing bearish sentiment and hedging activity as the stock faces technical and fundamental challenges. The 2700 strike price has become a focal point for downside protection, with significant volumes and turnover indicating strong market interest. While the company retains a solid market capitalisation and long-term support, near-term caution is warranted given the downgrade and price underperformance relative to its sector and benchmark indices.
Investors should balance these signals with broader sector trends and macroeconomic factors, using option market data as a valuable tool to gauge sentiment and potential price movements in the coming days.
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