Persistent Systems Ltd Sees Heavy Call Option Activity Amid Continued Downtrend

Persistent Systems’ Recent Price Performance

Persistent Systems Ltd (NSE: PERSISTENT) has been under pressure, with the stock price falling by 4.26% on 24 Feb 2026, underperforming the IT - Software sector’s decline of 3.22% and the broader Sensex’s modest 0.89% drop. The stock has recorded a consecutive five-day losing streak, cumulatively shedding 14.74% in value during this period. On the day in question, Persistent opened with a gap down of 2.06%, hitting an intraday low of ₹4,787, which represents a 3.83% drop from the previous close.

Technical indicators reveal the stock trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a sustained bearish momentum. Investor participation has also waned, with delivery volumes on 23 Feb falling by 13.53% compared to the five-day average, signalling reduced conviction among shareholders. Despite this, liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹11.57 crores.

Robust Call Option Activity at 4,900 Strike Price

Contrasting the bearish price action, the options market reveals a notable surge in call option trading for Persistent Systems. On expiry day 24 Feb 2026, the 4,900 strike call options emerged as the most actively traded, with 2,979 contracts changing hands. The turnover for these contracts reached ₹27.11 lakhs, while open interest stood at 1,058 contracts, indicating sustained interest and potential bullish bets at this strike price.

Given the underlying stock price of ₹4,774 at the time, the 4,900 strike represents an out-of-the-money call option, suggesting that traders are positioning for a rebound or a sharp upside move beyond this level. This activity could reflect speculative optimism or hedging strategies by institutional investors anticipating a reversal or positive news flow.

Mojo Score and Analyst Ratings

Persistent Systems currently holds a Mojo Score of 61.0, placing it in the 'Hold' category, a downgrade from its previous 'Buy' rating as of 5 Feb 2026. The Market Cap Grade stands at 2, reflecting its mid-cap status with a market capitalisation of approximately ₹78,535 crores. This rating adjustment aligns with the recent price weakness and sector underperformance, signalling a cautious stance among analysts.

While the downgrade tempers enthusiasm, the stock remains a key player in the Computers - Software & Consulting sector, which itself has declined by 3.12% on the day, indicating broader sectoral headwinds. Investors should weigh the fundamental outlook against the technical signals and options market activity.

Expiry Patterns and Investor Sentiment

The expiry day call option surge at the 4,900 strike price is particularly noteworthy given the stock’s current trading below this level. Such activity often points to speculative positioning, where traders anticipate a sharp rebound or are employing complex strategies such as spreads or hedges. The open interest of 1,058 contracts suggests that these positions are not merely intraday trades but may represent longer-term directional bets or hedging by institutional participants.

Given the stock’s five-day losing streak and technical weakness, the call option interest could also be interpreted as a contrarian signal, with some investors expecting a near-term recovery or positive catalyst. However, the risk remains elevated, and the stock’s underperformance relative to the sector and Sensex warrants caution.

Sectoral Context and Market Dynamics

The IT - Software sector, encompassing Persistent Systems, has faced pressure amid broader market volatility and profit-taking. The sector’s 3.12% decline on 24 Feb 2026 reflects concerns over global macroeconomic factors and earnings outlooks. Persistent’s sharper fall relative to the sector highlights company-specific challenges or profit-booking by investors.

Liquidity metrics indicate that Persistent Systems remains sufficiently liquid for sizeable trades, with delivery volumes of 3.8 lakh shares on 23 Feb, albeit down 13.53% from the recent average. This decline in investor participation may exacerbate price volatility, especially around expiry dates when options activity peaks.

Investor Takeaways and Outlook

Investors analysing Persistent Systems Ltd should consider the dichotomy between the bearish price trend and the bullish call option activity. The heavy trading of out-of-the-money call options at 4,900 strike price on expiry day suggests some market participants are positioning for a rebound or hedging against potential upside surprises.

However, the stock’s technical weakness, consecutive losses, and sectoral headwinds counsel prudence. The downgrade to a 'Hold' rating by MarketsMOJO reflects this cautious stance, emphasising the need for investors to monitor upcoming earnings, sector developments, and broader market conditions closely.

For those seeking exposure to the Computers - Software & Consulting sector, evaluating alternative mid-cap stocks with stronger fundamentals and momentum may be advisable, as highlighted by recent SwitchER analyses.

Conclusion

Persistent Systems Ltd’s recent market activity encapsulates the complexities of modern equity trading, where options market signals can diverge from spot price trends. The surge in call option volumes at the 4,900 strike price amid a falling stock price underscores a nuanced investor sentiment, blending speculative optimism with caution.

As expiry dates approach and volatility persists, investors should remain vigilant, balancing technical indicators, options market data, and fundamental analysis to navigate the evolving landscape of this mid-cap IT stock.

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