Bears Caught Off-Guard by Positive Earnings from Akamai Technologies, Inc.

Akamai Technologies, Inc. (AKAM) was targeted by heavy put volume on Wednesday, just ahead of the company's earnings report. During the course of yesterday's trading, speculators on the International Securities Exchange (ISE) bought to open 7,258 puts on AKAM, compared to just 2,031 calls. In other words, bearish bets were 3.57 times more popular than their bullish counterparts.

Today, those pessimistic players are likely kicking themselves. AKAM is up more than 15% at last check in the wake of a better-than-expected third-quarter report. The company raked in a profit of 38 cents per share on revenue of $206.5 million, and AKAM also offered fourth-quarter guidance that exceeded analysts' expectations.

As a result, today's option activity is markedly more upbeat than yesterday's. The most active strike is the December 20 put, with 2,541 contracts crossing the tape -- but most of these puts have traded near the bid price, revealing that they were most likely sold. Next up is the December 21 call, where 2,531 contracts have traded. More than half of these calls changed hands at the ask price, which points to buying activity.

Following today's positive earnings reaction, AKAM is now perched narrowly above its 20-month moving average. If the shares can maintain a foothold here through the end of tomorrow's session, it will mark the stock's first monthly finish atop this resistant trendline since June 2007.

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