Trader sees bottom in place for Icici
David Russell | firstname.lastname@example.org
optionMONSTER's monitoring systems detected the sale of more than 1,600 December 30 puts for $1.24. Volume was more than 5 times open interest at the strike.
The investor is now obligated to buy shares in the Indian bank if they close below $30 on expiration, but including the credit earned their entry price would be $28.76.
IBN rose 3.28 percent to $33.40 yesterday. The shares have been moving sideways all year but have recently held their 200-day moving average near $32. They also spent most of June consolidating around $30, which could be leading some chart watchers to expect support around that level.
While sentiment has been negative toward emerging markets such as India, IBN's last earnings report in July beat expectations as low interest rates increased its profit margin. Bad loans also fell.
Selling puts is a common way to express a bullish sentiment toward a stock because it lets the investor buy shares in the event of a pullback. And they'll make money even if it doesn't drop and let them get long. (See our Education section)
Overall option volume in the name was 11 times greater than average.