As Cognizant Technology tries to recover from a steep drop last month, one trader is betting on a floor beneath the outsourcing company's shares.
optionMONSTER's tracking systems show that 9,780 June 62.50 puts were sold in less than a minute today, led by a print of 8,674 that went for $1.65. The volume was well above the strike's open interest of 1,954 contracts before the session began, clearly indicating that this is a new position.
The put seller is looking for CTSH to stay above the $62.50 strike price until the June contracts expire five weeks from tomorrow. If the stock falls below that level, the trader will be on the hook to buy shares at an effective price of $60.85 once the $1.65 credit from the put sale is factored in.
CTSH is down 0.88 percent to $63.87 in early afternoon trading. The stock had plunged from above $77 in the second half of April after rival Infosys gapped lower on weak revenues and outlook. Cognizant rebounded after its own quarterly results on May 8 but pulled back and now appears to have found support at the $62 level.
More than 10,500 CTSH options have change hands overall so far today, already more than its full-session average for the last month.
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