Persistent Systems Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the derivatives market reveals that Persistent Systems Ltd (stock code: 234277) has emerged as one of the most actively traded stocks in put options. The most active put option contract is at the ₹4,800 strike price, with 3,925 contracts traded, generating a turnover of ₹783.67 lakhs. Open interest currently stands at 1,535 contracts, indicating sustained interest in downside protection or speculative bearish bets.

The underlying stock price is hovering around ₹4,805, just above the ₹4,800 strike, which suggests that traders are positioning themselves for a potential decline or increased volatility in the near term. The expiry date for these options is 30 March 2026, providing a time frame of just over a month for market developments to unfold.

Stock Performance and Technical Context

Despite the surge in put option activity, Persistent Systems has outperformed its sector by 0.9% today and has recorded a consecutive two-day gain, delivering a 2.7% return over this period. The stock touched an intraday high of ₹4,933, marking a 4.27% increase on the day. However, it is noteworthy that the share price remains below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a longer-term downtrend that may be prompting cautious positioning by investors.

Investor participation appears to be waning, with delivery volume on 25 February falling by 7.81% compared to the five-day average, suggesting reduced conviction in fresh buying. Liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹16.84 crores based on 2% of the five-day average traded value.

Market Capitalisation and Analyst Ratings

Persistent Systems is classified as a mid-cap company with a market capitalisation of ₹76,633 crores. The company’s Mojo Score currently stands at 61.0, reflecting a Hold rating, a downgrade from a previous Buy rating issued on 5 February 2026. The Market Cap Grade is 2, indicating moderate market capitalisation relative to peers in the Computers - Software & Consulting sector.

Implications of Elevated Put Option Volumes

The heightened put option volumes at the ₹4,800 strike price suggest that market participants are either hedging existing long positions or speculating on a potential price correction. Given the stock’s recent gains and proximity to key moving averages, this activity may reflect a cautious stance amid uncertainty about the sustainability of the rally.

Put options serve as insurance against downside risk, and the sizeable open interest indicates that a significant number of investors are seeking protection or positioning for a bearish outcome. This is particularly relevant as the expiry date approaches, when option positions are typically adjusted or closed out.

Sector and Broader Market Context

Within the Computers - Software & Consulting sector, Persistent Systems’ 1.35% one-day return outpaces the sector’s 0.28% gain and contrasts with the Sensex’s marginal decline of 0.10%. This relative strength may be attracting short-term traders, but the overall technical picture and option market activity point to a nuanced outlook.

Investors should also consider the broader macroeconomic environment and sector-specific headwinds, including technology spending trends and global supply chain dynamics, which could influence Persistent Systems’ near-term performance.

Investor Takeaways and Outlook

For investors, the current scenario presents a mixed picture. While Persistent Systems has demonstrated resilience with recent gains and outperformance relative to its sector, the elevated put option activity and technical indicators suggest caution. The downgrade from Buy to Hold by MarketsMOJO on 5 February 2026 further underscores the need for a measured approach.

Those holding long positions may consider protective strategies such as purchasing puts or tightening stop-loss levels to mitigate downside risk. Conversely, speculative traders might view the put option volumes as an opportunity to capitalise on potential volatility around the expiry date.

Monitoring the stock’s movement relative to key moving averages and open interest trends in the options market will be critical in assessing the evolving sentiment and price direction.

Conclusion

Persistent Systems Ltd’s surge in put option trading ahead of the 30 March 2026 expiry highlights a growing bearish sentiment or hedging activity despite recent positive price action. The stock’s technical positioning below major moving averages and a recent rating downgrade suggest investors should remain vigilant. Balancing the stock’s fundamental strengths with the cautious signals from the derivatives market will be essential for informed decision-making in the coming weeks.

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