Ahead of Infosys results on Monday, it seems traders are taking a neutral stance in the derivative segment.

As the stock swings wildly on result day, traders generally take a position in the options side to make the most of the gains. However, it appears traders do not expect any major swing in the stock on Monday.

Short position possibility The Infosys October futures have been adding open interest consistently in the last four days. On Friday, open interest jumped 7.43 lakh shares. Despite the sharp rise in open interest, the October contract ended at a discount at ₹1,165.35 against the underlying spot price of ₹1,167.40. According to analysts, this indicates the existence of short positions, and points to limited upside.

On Friday, shares of Infosys ended at ₹1,167.40, up 3.1 per cent, in the cash segment.

Trading in the options segment showed that the premiums of most call options rose on Friday on fresh buying. Out-of-the-money 1,200-strike call option added the maximum number of positions.

Resistance ahead At the end of the day, 1200-call options closed with the highest number of open interest at 12.61 lakh shares.

According to a Chennai-based derivative analyst, this indicates that ₹1,200 may act as a strong resistance for the stock.

Open interest captures the total number of contracts on a security, including the number of future contracts or options contracts that have not been exercised, expired or fulfilled by delivery.

On the downside, ₹1,100 or ₹1,060 are likely to act as strong support levels for Infosys, given the activity in put options, he added.

Both the strikes added significant number of open interest ahead of results, he added.

In January 2013, the stock surged nearly 17 per cent on result day, when the company announced a strong future guidance.

Similarly, in the same year in April, the stock collapsed almost 22 per cent after it had reported disappointing fourth quarter numbers and lower-than-expected guidance for the new fiscal.

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