I have followed IT outsourcing firm Cognizant (CTSH) for several years, and have expressed concern over growth sustainability for the last year or so. So far that concern appears premature, as the stock is up 11.2% compared to a 4.9% decline in the S&P since I wrote about the stock for RealMoney.
Today, the StockPickr screen for stocks with unusual option volume is showing unusual volume in the January 2009 calls with a $45 strike price - approximately 20% above the current level.
Sometimes such volume in out-of-the money calls indicates knowledge that a deal may be coming, though typically in such cases the options would be a shorter duration. Other possible reasons could be an attempt to capture a small additional yield or a more complicated multi-option strategy designed to capture who knows what. It could simply be that the other options involved in such a strategy normally trade higher volumes than the January $45’s, and therefore do not get flagged for unusual volume.
Still, it caught my eye, and it will be interesting to see if anything comes of it.
Disclosure: At time of publication, William Trent has no financial position in the companies mentioned in this article.
