Unusual volume in NiSource, Inc. put options signifies potential buying opportunity. The stock is down 6% to $39.31 from $41.80, with no apparent cause. A massive volume in $40.00 put options expiring in two weeks hints at a lucrative yield opportunity for short sellers.

The $40.00 put option has seen over 5,400 contracts traded today, 48 times the previous outstanding amount. Buyers anticipate NiSource stock to drop below $38.60 to break even. Short sellers can make an immediate 3.0% yield, expecting the stock to stay above $40.00 by Sept. 19.

Investors could earn 9.0% on an expected return basis by repeating the short-put play. A dividend-based price target analysis suggests NiSource stock could be valued at $41.00, 4.22% over current price. Analysts’ price targets average at $45.11, indicating an undervalued stock. The $40.00 puts offer a buying opportunity and a short-term yield play.

Read more at Yahoo Finance: Unusual Put Options Activity in NiSource Stock Signals Buying Opportunity