Monday, April 2, 2012

Infosys Technologies (INFY) - Put Buyer as Earnings Approach, Vol Remains Depressed

INFY is trading $57.29, up 0.5% with IV30™ down 0.9%. The LIVEVOL® Pro Summary is below.


Click for Free Trial


Infosys Limited (Infosys), formerly Infosys Technologies Limited, is a global technology services company. The Company provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries.

This is an order flow note just ahead of earnings. The company has traded over 12,000 contracts on total daily average option volume of just 2,308. All but 200 contracts traded have been puts, yielding a 56.6:1 put:call ratio. The action has been in the Apr 55 puts, where 9,433 have traded as of this writing. The Stats Tab and Day's biggest trades snapshots are included (below).

The Options Tab (below) illustrates that the Apr puts are mostly opening (compare OI to trade size). You'll note that the May 52.5 puts also show that 9,000 size, but looking back to the day's biggest trades snap, we can see those were cancelled. It's an odd reality -- either that Apr trade was in fact a spread (as indicated from PHLX), or it was one leg. Either way, I see long Apr puts and if anything, short the lower strike in May.  With stock volume below the daily average (so the puts weren't turned into synthetic calls), this looks like a bet to the downside on the next earnings date, which Livevol® confirms for 4-13-2012 BMO.

The Skew Tab snap (below) illustrates the vols by strike by month.

The skew across all three front expiries is quite pretty. Apr is elevated due to the earnings release due out. No single strike shows odd behavior -- at least yet.

Finally, the Charts Tab (six months) is below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

The stock has been quite calm of late. HV10™ is just 22.45%.. In fact, HV30™ is sub 20% (19.97%). That's in contradiction to the HV180™ which is 38.46%. The current implied is just in the 33rd percentile (annual) and earnings are approaching with a large put buyer in play.

NB: The 52 wk range in IV30™ is [23.63%, 56.25%].

This is trade analysis, not a recommendation.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

Legal Stuff:

No comments:

Post a Comment