Skepticism drives Accenture trade

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For the second day in a row, traders are hammering the upside in Accenture.

optionMONSTER's monitoring programs detected the sale of more than 20,000 December 77.50 calls, most of which priced for $0.80. Volume was more than 250 times open interest at the strike, indicating that new positions were initiated.

The investor is now on the hook to unload more than 2 million shares in the IT consultancy for $77.50 if they're above that level on expiration. He or she is probably long the name and has sold the contracts as part of a covered-call strategy . (See our Education section)

It reflects a belief that ACN will struggle to climb above $77.50, not far from the $78 area where it peaked in September before proceeding to make a lower low this month. The trader probably views that price as resistance and would be willing to exit around that level.

ACN is up fractionally to $73.69 in morning trading. While the stock hit an all-time high earlier this year, it's down 8 percent since mid-June and guidance has been weak during the last two quarterly reports.

Total option volume is 9 times greater than average in the session. Yesterday also saw a short position in the calls rolled forward as an investor looked for a range-bound trading well into next year.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: ACN

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