Persistent Systems Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 19 February 2026, Persistent Systems Ltd (NSE: PERSISTENT) recorded the most active put options with two prominent strike prices attracting substantial volumes. The 5,400 strike price saw 8,079 contracts traded, generating a turnover of ₹771.54 lakhs, while the 5,300 strike price accounted for 5,177 contracts with a turnover of ₹305.75 lakhs. Open interest at these strikes stood at 1,214 and 1,153 contracts respectively, indicating sustained interest beyond just intraday speculation.

The underlying stock price was ₹5,374 at the time, placing these strike prices slightly out-of-the-money, which is typical for hedging or speculative bearish bets. The concentration of activity at these levels suggests traders are positioning for a potential decline or protecting existing long holdings from further downside risk.

Technical and Price Performance Context

Persistent Systems has been under pressure recently, with the stock falling 2.65% on the day and underperforming its sector by 3.41%. Over the last two trading sessions, the stock has declined by 4.53%, touching an intraday low of ₹5,363 on 19 February. The weighted average traded price skewed closer to the day’s low, signalling selling pressure.

Technically, the stock is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a bearish trend. Investor participation has also waned, with delivery volumes on 18 February falling by 62.33% compared to the five-day average, suggesting reduced conviction among buyers.

Market Capitalisation and Sector Positioning

With a market capitalisation of ₹86,525 crores, Persistent Systems is classified as a mid-cap stock within the Computers - Software & Consulting sector. Despite its sizeable market cap, the company’s Mojo Score has recently been downgraded from a Buy to a Hold rating as of 5 February 2026, reflecting a more cautious outlook by analysts. The current Mojo Score stands at 61.0, with a Market Cap Grade of 2, indicating moderate quality but some concerns over near-term momentum.

Investor Sentiment and Hedging Implications

The surge in put option volumes at the 5,300 and 5,400 strike prices ahead of the 24 February expiry suggests a growing bearish sentiment or a strategic hedging move by investors. Put options provide downside protection, allowing holders to limit losses if the stock price declines. The elevated open interest at these strikes confirms that this is not merely speculative day trading but a more deliberate positioning.

Given the stock’s recent weakness and technical breakdown below key moving averages, market participants appear to be bracing for further downside or volatility in the near term. This is consistent with the downgrade in the Mojo Grade from Buy to Hold, signalling a more cautious stance from analysts and investors alike.

Comparative Sector and Market Performance

Persistent Systems’ 1-day return of -2.83% contrasts sharply with the sector’s positive 0.65% gain and the broader Sensex’s marginal decline of -0.36%. This relative underperformance highlights the stock’s vulnerability amid a generally stable or mildly positive sector environment. Such divergence often attracts hedging activity as investors seek to protect gains or limit exposure to a lagging stock within a buoyant sector.

Liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹11.68 crores based on 2% of the five-day average traded value. This ensures that option market participants can execute sizeable trades without significant market impact, facilitating the observed heavy put option volumes.

Expiry Patterns and Strategic Outlook

The 24 February 2026 expiry is a focal point for option traders, with the bulk of put activity concentrated at strikes just below and near the current market price. This pattern suggests that investors are either speculating on a near-term correction or actively hedging existing long positions against downside risk in the coming week.

Given the stock’s technical weakness and recent downgrade, the risk of further declines cannot be discounted. Investors should monitor open interest and volume trends closely as expiry approaches to gauge whether bearish sentiment intensifies or if a reversal emerges. The interplay between spot price movements and option activity will provide critical clues for positioning ahead of the next earnings or sector developments.

Conclusion: Cautious Positioning Amid Uncertainty

Persistent Systems Ltd’s heavy put option trading ahead of the 24 February expiry reflects a cautious market stance amid deteriorating price action and technical signals. The stock’s downgrade to a Hold rating and underperformance relative to its sector reinforce the need for prudent risk management. Investors holding the stock may consider protective strategies, while prospective buyers should await clearer signs of trend reversal before committing fresh capital.

Overall, the option market activity serves as a valuable barometer of investor sentiment, highlighting the importance of monitoring derivatives alongside cash market movements for a comprehensive view of stock prospects.

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