Waiting for Infosys
Will Infosys shares swing wildly as in the past many quarters after quarterly results ?
Options traders have started building up positions, as usual, at the Infosys Ltd counter. Open interest on Infosys options rose by 41.5% on Wednesday, two days ahead of the company’s results announcement. The implied volatility based on premiums of near-the-money options was around 60-65%, which implies that traders expect a sharp swing in Infosys shares on Friday. During the past three quarterly results announcements, Infosys shares have risen/fallen by more than 10%; although option premiums are now so high that the stock will have to move by well more than 15% for straddle buyers to profit. In a straddle position, traders buy both a call and a put option, expecting to profit from a sharp move in either direction.