Persistent Systems Sees Heavy Put Option Activity Amid Bearish Sentiment

Persistent Systems’ Recent Market Performance

Persistent Systems Ltd (NSE: PERSISTENT) has been under pressure in recent sessions, with the stock falling by 4.26% on 24 Feb 2026, underperforming its sector which declined 3.22%, and the broader Sensex which slipped 0.89%. The stock has recorded a consecutive five-day decline, losing approximately 14.74% over this period. It opened the day with a gap down of 2.06% and touched an intraday low of ₹4,787, representing a 3.83% drop from the previous close.

Technical indicators reveal Persistent Systems is trading below all major moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a sustained downtrend. The IT - Software sector itself has declined by 3.12% on the day, reflecting broader sectoral weakness. Additionally, investor participation appears to be waning, with delivery volumes falling 13.53% against the five-day average, suggesting reduced conviction among buyers.

Put Option Activity Highlights Bearish Positioning

Options market data reveals Persistent Systems as one of the most active stocks in put options trading. The most heavily traded put contracts are clustered around strike prices of ₹4,600, ₹4,700, and ₹4,800, with expiry dates predominantly on 24 Feb 2026 and 30 Mar 2026. This concentration of put activity at strikes near or slightly above the current underlying price of ₹4,774 indicates investors are positioning for further downside or seeking protection against potential declines.

Specifically, on 24 Feb 2026 expiry, the ₹4,800 strike saw 6,625 contracts traded with a turnover of ₹180.00 lakhs and open interest of 799 contracts. The ₹4,700 strike had 4,373 contracts traded, turnover of ₹51.21 lakhs, and open interest of 1,024 contracts. The ₹4,600 strike recorded 3,257 contracts traded with ₹17.62 lakhs turnover and 682 open interest. For the 30 Mar 2026 expiry, the ₹4,800 strike also attracted significant activity with 3,243 contracts traded, turnover of ₹786.78 lakhs, and open interest of 972 contracts.

This elevated put option volume and open interest at these strikes suggest a strong hedging demand or outright bearish bets, as traders seek downside protection or speculate on further price weakness. The high turnover, especially for the 30 Mar expiry, indicates sustained interest beyond the immediate expiry, reflecting concerns about the stock’s medium-term outlook.

Mojo Score and Analyst Ratings

Persistent Systems currently holds a Mojo Score of 61.0, categorised as a Hold, having been downgraded from a Buy rating on 5 Feb 2026. The downgrade reflects a reassessment of the company’s near-term prospects amid sectoral headwinds and valuation pressures. The market cap grade stands at 2, consistent with its mid-cap status and liquidity profile. Despite the downgrade, the stock remains liquid enough to support sizeable trades, with a 2% threshold of the five-day average traded value allowing for trade sizes up to ₹11.57 crore.

Sectoral Context and Investor Sentiment

The Computers - Software & Consulting sector has faced headwinds recently, with Persistent Systems’ underperformance mirroring broader IT sector weakness. The sector’s 3.12% decline on the day underscores challenges such as margin pressures, global macroeconomic uncertainties, and cautious client spending. Persistent’s stock price action and option market activity suggest investors are increasingly wary of near-term risks.

Investor participation metrics, including a 13.53% drop in delivery volumes, indicate a reduction in conviction among buyers, potentially signalling a wait-and-watch approach or profit-taking. The stock’s trading below all key moving averages further reinforces the bearish technical outlook, which may be driving the surge in put option demand as a hedge or speculative play.

Expiry Patterns and Strike Price Concentration

The clustering of put option volumes around the ₹4,700 to ₹4,800 strikes for the 24 Feb and 30 Mar expiries is particularly noteworthy. These strikes are close to the current market price, suggesting that traders are actively managing risk around this price band. The higher open interest at the ₹4,700 strike for the near expiry (1,024 contracts) indicates a significant number of outstanding bearish positions or hedges that could influence price dynamics as expiry approaches.

Meanwhile, the substantial turnover of ₹786.78 lakhs for the ₹4,800 strike put expiring on 30 Mar 2026 reflects a longer-term bearish or protective stance. This may be indicative of market participants anticipating continued volatility or downside risk over the coming month.

Implications for Investors

The pronounced put option activity in Persistent Systems signals heightened caution among market participants. Investors holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the elevated put volumes as confirmation of negative sentiment and potential for further price declines.

Given the stock’s current technical weakness and sectoral challenges, a conservative approach is advisable. Monitoring open interest changes and expiry dynamics in the coming weeks will be crucial to gauge whether bearish positioning intensifies or unwinds. Additionally, investors should keep an eye on broader IT sector developments and company-specific news that could alter the risk-reward profile.

Company Fundamentals and Outlook

Persistent Systems operates in the competitive software and consulting space with a market capitalisation of approximately ₹78,535 crore. Despite recent share price weakness, the company’s fundamentals remain solid, though the downgrade from Buy to Hold by MarketsMOJO on 5 Feb 2026 reflects tempered expectations amid near-term uncertainties. The Mojo Score of 61.0 suggests a neutral stance, balancing growth potential against valuation and risk factors.

Investors should weigh these fundamentals alongside technical and options market signals to make informed decisions. The current environment favours a cautious stance, with put option activity serving as a useful barometer of market sentiment and risk appetite.

Conclusion

Persistent Systems Ltd’s recent surge in put option trading, concentrated at strikes near the current price and spanning near and medium-term expiries, underscores a growing bearish sentiment among investors. Coupled with the stock’s technical underperformance and sectoral headwinds, this activity highlights the importance of risk management and careful analysis for market participants. While the company’s fundamentals remain intact, the cautious positioning reflected in the options market warrants close monitoring as expiry dates approach and broader market conditions evolve.

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