Infosys Plunge Gives Options Traders 200% Profit on Strangle Bet
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Options traders who bet Infosys Ltd.’s sales outlook would surprise investors tripled their money today as the stock tumbled the most in a decade.
Traders who bought out-of-the money puts and calls on Infosys yesterday, a wager known as a strangle that benefits when volatility increases, earned 245 percent at 4:36 p.m. in Mumbai, based on the most-traded contracts. A similar strategy called a straddle returned 118 percent, data compiled by Bloomberg show. Infosys shares tumbled 21 percent to 2,296.65 rupees, the biggest drop since April 2003, after the company’s annual sales forecast trailed analysts estimates.