One big investor harbors doubts about Accretive Health as the billing company tests long-term resistance.
optionMONSTER's tracking programs detected the sale of about 2,900 January 12.50 calls against open interest of 2,174 contracts. Premiums fell from $0.30 to $0.15 as the trades crossed, reflecting the strong selling pressure.
The activity reflects a belief that the shares will struggle to advance past $12.50. If they do go above that level, the investor will have to sell shares. He or she probably owns the stock and wrote the contracts to earn extra income. (See our Education section for more on the strategy, known as a covered call .)
AH is down 1.73 percent to $11.94 in early afternoon trading and has been moving sideways for more than six months. The company, which provides billing and patient-management services, plunged in April after getting accused of violating debt-collection laws and has reported weak earnings since then. It has also struggled to trade above $12 in recent months, which could help explain today's call selling.
Total option volume in the company is 28 times greater than average so far today.
More From optionMONSTER
- Investment & Company Information