How put selling bets on Infosys gains

Chris McKhann (
November 6, 2012

Shares of Infosys are in the middle of their recent range, but one trader sees the stock moving higher.

Today's INFY option volume tops 5,300 contracts, which compares to a daily average of 1,100 in the last month. Almost all of that is in the December 45 puts, according to optionMONSTER's tracking systems.

A trader sold 5,000 of those contracts, almost all of them for $2.30. Open interest at the start of the session was just 100, so this is a new position.

The in-the-money put selling is a bet that INFY will be above $45 by expiration, but the trader does see a limited range. The put selling can profit down to $42.70 and will outperform buying the stock directly up to $47.30. (See our Education section)

INFY is off 0.3 percent to $43.90 this morning. The India-based technology outsourcing company was up at resistance around $50 a month ago, its highest level since gapping down from above $56 in mid-April. Shares had fallen to a 52-week low of $37.93 in late July before trending up to that resistance level.

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