Persistent Systems Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Surge Highlights Bearish Sentiment

On 29 January 2026, Persistent Systems Ltd (NSE: PERSISTENT) recorded an unusually high volume of put options traded, with 3,387 contracts changing hands at the 6,000 strike price for the 24 February expiry. This activity generated a turnover of approximately ₹6.57 crores, reflecting a robust interest in downside protection or speculative bearish bets. The open interest at this strike stands at 531 contracts, indicating sustained positioning rather than a one-off spike.

The underlying stock price hovered near ₹6,022, just above the 6,000 strike, suggesting that traders are positioning for a potential decline or increased volatility in the coming weeks. The weighted average price of traded options skewed towards the lower end of the day’s price range, reinforcing the bearish undertone.

Price Performance and Technical Context

Persistent Systems has underperformed its sector by 1.63% on the day, with a 3.15% decline over the past two sessions. The stock touched an intraday low of ₹6,001 on 29 January, marking a notable dip below recent short-term moving averages. While the price remains above the 100-day and 200-day moving averages, it is trading below the 5-day, 20-day, and 50-day averages, signalling short-term weakness amid longer-term support.

Investor participation has also waned, with delivery volumes falling by 54.88% compared to the five-day average, indicating reduced conviction among buyers. Despite this, liquidity remains adequate, with the stock’s traded value supporting transactions up to ₹10.22 crores comfortably.

Mojo Score and Analyst Ratings

Persistent Systems currently holds a Mojo Score of 77.0, categorised as a Buy rating, following a recent downgrade from Strong Buy on 27 January 2026. This adjustment reflects a tempered outlook amid recent price softness and increased market caution. The company’s market capitalisation stands at ₹95,109 crores, placing it firmly in the mid-cap segment.

The downgrade signals that while the stock retains fundamental strength, near-term risks have increased, possibly due to sector headwinds or broader market volatility. Investors should weigh these factors carefully when considering exposure.

Expiry Patterns and Put Option Concentration

The 24 February 2026 expiry has attracted the bulk of put option activity, with the 6,000 strike price emerging as a focal point. This strike is slightly out-of-the-money relative to the current underlying price, suggesting traders are hedging against a moderate downside or speculating on a correction.

Open interest data reveals that this strike price has accumulated significant positions over recent sessions, indicating that market participants expect the stock to test or breach this level before expiry. Such concentration often precedes heightened volatility as expiry approaches.

Implications for Investors and Traders

The heavy put option activity signals a cautious or bearish stance among sophisticated investors and traders. This could be driven by concerns over sectoral challenges, earnings prospects, or broader macroeconomic factors impacting the technology consulting space.

For long-term investors, the current dip may represent a buying opportunity given the stock’s solid fundamentals and mid-cap growth potential. However, short-term traders should remain vigilant for further downside risks and consider protective strategies such as stop-loss orders or option hedges.

Sector and Market Context

The Computers - Software & Consulting sector has experienced mixed performance recently, with Persistent Systems underperforming the sector’s 1.48% decline by a wider margin. The broader Sensex index showed resilience, declining only 0.27% on the same day, highlighting sector-specific pressures.

Persistent Systems’ recent price action and option market behaviour may reflect investor concerns about competitive pressures, margin sustainability, or delayed contract wins. These factors warrant close monitoring as the company approaches its next earnings announcement.

Conclusion: Navigating Near-Term Volatility

Persistent Systems Ltd’s elevated put option volumes and declining stock price underscore a cautious market stance. While the company’s fundamentals remain intact, the technical signals and option market positioning suggest investors should prepare for potential near-term volatility.

Market participants may find value in monitoring open interest trends and expiry dynamics closely, as these often presage significant price movements. Balancing long-term conviction with tactical risk management will be key for investors navigating this evolving landscape.

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