Investor tries to time trade in Akamai
David Russell | firstname.lastname@example.org
optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,100 March 44 calls for $1.45 and the sale of an equal number of February 44 calls for $1. Volume was below the previous open interest in the February contracts, indicating that an existing position was rolled forward in time.
The noteworthy thing about the transaction is that it occurred shortly before the company reports fourth-quarter earnings this afternoon. Those February calls will lose value quickly as time decay accelerates with the approach of expiration at the end of next week, so the investor adjusted the position.
Now instead of looking for an immediate pop, this trader can still make money from a more gradual move higher. He or she paid an incremental $0.45 to make the change. (See our Education section for more on how options can be used to manage trades.)
AKAM fell 0.75 percent to $41.05 yesterday. While recent earnings reports have been strong, the web-traffic services company is sitting at a level that's been resistance since April 2011, which be leading some chart watchers to believe that it won't break out right away.
Total option volume was 4 times greater than average in the session, according to the Heat Seeker.