tradeMONSTER: Trade free for 90 days

Options Trading News

January 11, 2013  Fri 10:08 AM CT

INFY: SEE CHART GET CHAIN FIND STRATEGIES
Infosys exploded higher today, at least one big investor wants to protect against a drop.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 3,600 January 50 puts for $0.25 to $0.40. Volume is more than 11 times open interest at the strike, indicating that new positions were initiated

Those puts lock in the price where investors can sell shares in the Indian outsourcing company. They will appreciate rapidly in value if the stock falls but will become worthless if it doesn't drop. The investor is probably using them as insurance to protect today's profit against a near-term decline. (See our Education section)

INFY is up 16.75 percent to $51.31 in morning trading. The company surprised investors in the overnight session by raising its revenue outlook and reporting better-than-expected quarterly results.

Today's move brought the stock back to its highest level since April, when it gapped lower on a weak outlook. Given that it's back to this high, some traders may expect it to retreat, which would explain today's protection buying.

Total option volume in the name is 9 times greater than average so far today.
Share this article with your friends


Related Stories

INFY

Infosys draws vote of confidence

December 5, 2014

The India-based technology-outsourcing company fell yesterday but is up some 14 percent in the last three months and at its highest levels since April 2011.

Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER