Persistent Systems Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 19 February 2026, Persistent Systems saw a remarkable spike in put option volumes, particularly at the ₹5,000 and ₹5,100 strike prices, both expiring on 24 February 2026. The ₹5,100 strike led with 8,825 contracts traded, generating a turnover of ₹954.07 lakhs, while the ₹5,000 strike followed closely with 8,333 contracts and ₹574.81 lakhs turnover. Open interest figures stood at 1,156 and 1,920 contracts respectively, indicating sustained interest in downside protection or speculative bearish bets.

The underlying stock price at the time was ₹5,142, placing these strike prices slightly below and near the current market level, which suggests traders are positioning for a potential decline or increased volatility in the near term.

Technical and Price Performance Context

Persistent Systems has been under pressure recently, with the stock falling for three consecutive sessions, accumulating a loss of 9.33% over this period. On 19 February, the stock touched an intraday low of ₹5,081, down 3.51% from the previous close. This decline notably outpaced the sector’s 0.63% fall and contrasted with the Sensex’s marginal 0.07% gain, underscoring relative weakness.

Technically, the stock is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish trend across multiple timeframes. The rising delivery volume of 6.87 lakh shares on 19 February, a 37.64% increase over the five-day average, indicates heightened investor participation amid the sell-off, possibly reflecting increased hedging or exit activity.

Market Capitalisation and Analyst Ratings

Persistent Systems commands a market capitalisation of approximately ₹83,152 crores, categorising it as a mid-cap stock within the Computers - Software & Consulting sector. The company’s Mojo Score currently stands at 61.0, with a Mojo Grade of Hold, downgraded from Buy on 5 February 2026. This rating revision reflects a cautious stance by analysts amid the recent price weakness and evolving market dynamics.

Implications of Put Option Concentration

The concentration of put option activity at the ₹5,000 and ₹5,100 strikes suggests that market participants are either hedging existing long positions or speculating on further downside. The substantial turnover and open interest at these strikes indicate that traders expect the stock to test or breach these levels before expiry.

Given the stock’s current trading below all key moving averages and the recent downgrade in analyst sentiment, the put buying could be interpreted as a protective measure against further declines. Alternatively, it may reflect outright bearish bets anticipating a correction or volatility spike in the near term.

Expiry Patterns and Investor Behaviour

With the 24 February expiry approaching, the elevated put option volumes highlight a tactical shift in positioning. Investors often increase put buying ahead of expiry to hedge against short-term risks or to capitalise on expected volatility. The open interest data confirms that these positions are not merely intraday trades but represent sustained interest.

Moreover, the stock’s liquidity profile supports sizeable trades, with a 5-day average traded value sufficient to accommodate Rs 11.35 crore trade sizes comfortably. This liquidity ensures that option market activity is reflective of genuine investor sentiment rather than sporadic speculative flows.

Sector and Market Comparison

Persistent Systems’ underperformance relative to its sector and the broader Sensex index is notable. While the sector declined by 0.63% on the day, Persistent Systems fell by 2.39%, signalling stock-specific pressures. This divergence may be driven by company-specific news, earnings concerns, or broader market rotation away from mid-cap software stocks.

Investors should also consider the company’s market cap grade of 2, indicating moderate size and liquidity relative to peers. This factor can influence volatility and option pricing, making the current put option activity a critical barometer of market expectations.

Investor Takeaways and Outlook

For investors and traders, the surge in put option activity at near-the-money strikes ahead of expiry is a clear signal to reassess risk exposure in Persistent Systems. The stock’s technical weakness, combined with a downgrade in analyst rating and increased bearish positioning, suggests caution is warranted in the short term.

Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels. Conversely, speculative traders might view the elevated put volumes as an opportunity to capitalise on potential downside or volatility spikes.

Longer-term investors should monitor upcoming earnings, sector trends, and broader market conditions to gauge whether the current bearish sentiment is a temporary correction or indicative of a more sustained downtrend.

Conclusion

Persistent Systems Ltd’s recent option market activity reveals a pronounced shift towards bearish sentiment and hedging ahead of the 24 February expiry. The heavy put option volumes at ₹5,000 and ₹5,100 strike prices, combined with the stock’s technical underperformance and rating downgrade, underscore investor caution. Market participants should carefully analyse these signals within the broader context of sector dynamics and company fundamentals to make informed decisions.

Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today