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September 21, 2016  Wed 9:32 AM CT

CTSH : SEE CHART GET CHAIN FIND STRATEGIES

A large trade is betting that Cognizant Technology will hold its ground in coming months.

optionMONSTER's monitoring programs show that 3,400 November 45 puts were sold for $0.35 and $0.40 at the same time today. This is clearly a new position, as open interest in the strike was a mere 46 contracts before the trade occurred.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think the risk of a big drop is limited. (See our Education section.)

CTSH is up 0.33 percent to $53.13 this morning but has fallen 14 percent in the last three months. The IT-consulting service is expected to announce its next quarterly results in pre-market hours on Nov. 2.

Overall option volume in the name is twice its daily average so far today.

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