Infosys Options Drop Most in 3 Months as Forecast Maintained

Infosys Ltd. options dropped after India’s second-largest software exporter maintained its dollar revenue forecast and reported profit that beat estimates.

At-the-money implied volatility, a measure of protection against stock swings using options, slumped 24 percent to 24.4 at 4 p.m. in Mumbai, the most since Oct. 10. Calls with a strike price of 2,100 rupees had the highest volume, with 38,459 contracts changing hands. Total open interest climbed to 44,764 contracts, compared with the 20-day average of 19,928, data compiled by Bloomberg show.

“Volatility will decline further as the revenue guidance has been maintained,” Supreeth Shankarghal, a director at hedge fund QF Assets Ltd., said by phone from Bengaluru. Traders who sold put and call options, a bet known as a strangle that pays when volatility ebbs, are “reaping profits,” he said.

Net income climbed 13 percent to 32.5 billion rupees ($521 million) in the December quarter from a year earlier, exceeding the 31.6 billion-rupee median of 29 analysts’ estimates in a Bloomberg survey. Infosys maintained its forecast for full-year sales to rise 7 percent to 9 percent in U.S. dollar terms.

Infosys surged 5.1 percent to 2,074.45 rupees, the most since Oct. 10. The stock rose 13 percent in 2014, trailing the 30 percent advance in the Sensex, as investors favored shares linked to the local economy on optimism Prime Minister Narendra Modi’s government will revive growth.

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