Persistent Systems Sees Heavy Put Option Activity Amid Bearish Sentiment

Surge in Put Option Volumes and Open Interest

On 21 January 2026, Persistent Systems recorded substantial put option volumes across multiple strike prices, with the highest activity concentrated between ₹5,900 and ₹6,300. The most actively traded put option was at the ₹6,000 strike, with 12,615 contracts exchanged, generating a turnover of ₹836.88 lakhs and an open interest of 2,358 contracts. This was closely followed by the ₹6,100 strike, which saw 9,359 contracts traded and a turnover of ₹906.70 lakhs, alongside an open interest of 1,151 contracts.

Other notable strikes included ₹6,200 with 8,131 contracts (turnover ₹1,014.59 lakhs), ₹5,900 with 5,974 contracts (turnover ₹266.92 lakhs), and ₹6,300 with 5,599 contracts (turnover ₹927.14 lakhs). The underlying stock price stood at ₹6,077.50, indicating that these strike prices are positioned near or slightly above the current market level, suggesting investors are actively hedging against potential declines or speculating on a downward move.

Price Performance and Market Context

Persistent Systems has underperformed its sector by 2.94% on the day, with the stock price falling 3.51% to close near its intraday low of ₹6,095.50. Over the past two trading sessions, the stock has declined by 5.26%, reflecting growing investor caution. The weighted average traded price skewed closer to the day’s low, indicating selling pressure.

Technically, the stock remains above its 100-day and 200-day moving averages, which often serve as long-term support levels. However, it is trading below its 5-day, 20-day, and 50-day moving averages, signalling short- to medium-term weakness. Rising delivery volumes, which increased by 58.54% to 2.59 lakh shares on 20 January compared to the five-day average, suggest heightened investor participation amid the recent sell-off.

Investor Sentiment and Hedging Strategies

The heavy put option activity at strikes above the current market price points to a cautious or bearish stance among traders. Such positioning can serve multiple purposes: outright bearish bets anticipating further declines, or protective hedges by long stock holders seeking to limit downside risk ahead of the expiry.

Open interest figures reinforce this narrative, with significant outstanding contracts at the ₹6,000 and ₹6,100 strikes. The concentration of open interest near these levels may also indicate potential support zones where option writers could be active, adding complexity to price dynamics as expiry approaches.

Fundamental Strength Amidst Volatility

Despite the recent price weakness and bearish option positioning, Persistent Systems maintains a robust fundamental profile. The company holds a strong Mojo Score of 84.0, reflecting solid financial health, growth prospects, and operational efficiency. Its Mojo Grade was recently upgraded from Buy to Strong Buy on 19 January 2026, underscoring improved confidence from analysts and rating agencies.

With a market capitalisation of approximately ₹99,943 crores, Persistent Systems is classified as a mid-cap stock within the Computers - Software & Consulting sector. This sector has generally exhibited resilience, but the stock’s recent underperformance relative to its peers and the broader Sensex (-4.55% versus -0.16% Sensex return on the day) highlights sector-specific or company-specific challenges that investors are factoring into their strategies.

Expiry Patterns and Market Implications

The expiry date of 27 January 2026 is less than a week away, intensifying the focus on option activity as traders adjust their positions. The clustering of put option volumes and open interest near the ₹6,000 to ₹6,300 range suggests that this price band will be critical in the coming days. Should Persistent Systems breach these levels decisively, it could trigger further downside momentum or prompt option writers to hedge aggressively.

Conversely, if the stock stabilises above these strikes, it may indicate that the bearish sentiment is overextended, potentially paving the way for a technical rebound. Investors and traders will be closely monitoring volume patterns, price action, and open interest changes to gauge the evolving market consensus.

Balancing Risks and Opportunities

For investors, the current environment presents a nuanced picture. The strong fundamental rating and recent upgrade to Strong Buy suggest Persistent Systems remains a compelling long-term investment. However, the pronounced bearish option activity and recent price declines highlight near-term risks that warrant caution.

Traders utilising options may find opportunities in the elevated put volumes to hedge existing positions or speculate on volatility. Meanwhile, long-term investors should monitor technical support levels and sector trends closely, considering the stock’s liquidity and rising investor participation as potential stabilising factors.

Overall, Persistent Systems exemplifies the dynamic interplay between fundamental strength and market sentiment, with option market data providing valuable insights into investor psychology ahead of a critical expiry.

Conclusion

Persistent Systems Ltd’s recent surge in put option trading ahead of the 27 January 2026 expiry reflects a cautious market stance amid short-term price weakness. While the stock’s fundamentals remain robust, the elevated bearish positioning and open interest near key strike prices underscore investor concerns about downside risk. As expiry approaches, the ₹6,000 to ₹6,300 strike range will be pivotal in determining the stock’s near-term trajectory. Investors should weigh the strong fundamental outlook against technical signals and option market dynamics to navigate this evolving landscape effectively.

Unlock special upgrade rates for a limited period. Start Saving Now →