Options action during Friday's trading session suggests an investor expects limited upside during the next month in Sybase Inc. (NYSE: SY ) .
During midday trading, 5,000 July 65 puts changed hands for 40 cents per contract , which was closer to the bid price at the time of the trade. These near-the-money puts are home to current open interest of 98 contracts, indicating the investor most likely initiated to options action to open. A look at time and sales shows these options were not tied to a stock position, indicating the investor is calling for SY shares to be trading higher than $64.60 at July options expiration in 28 days. If SY shares do not drop much more than their losses on the day on Friday, this investor could make a maximum profit of the credit collected, or 40 cents per sold put. If the stock is trading lower than the breakeven price, this short put trade could incur significant losses in direct relation to the stock's movement toward zero (maximum loss of $64.40 to the downside if SY shares are trading at zero at expiration).
SY did not announce any news today, and the stock dropped eight cents to $64.66 during afternoon trading. The market expects SY to announce earnings around July 21.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.