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Skepticism drives Accenture trade

By: optionMONSTER
Posted: 10/22/2013 11:12:00 AM
Referenced Stocks: ACN

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.