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Akamai Technologies Options Trading Surges Amid Bets on Potential Takeover

By Nikolaj Gammeltoft - 2010-08-19T20:38:57Z

Aug. 10 (Bloomberg) -- Thyra Zerhusen, managing director at Optimum Investment Advisors, talks with Bloomberg’s Julie Hyman and Mark Crumpton about her investment strategy and the performance of Akamai Technologies Inc., BorgWarner Inc. and Manpower Inc. shares. (Source: Bloomberg)

Akamai Technologies Inc. options trading jumped to more than three times the four-week average on speculation that the software company may be acquired.

56,331 calls to buy the stock changed hands, more than 5 times the number of puts to sell, as the shares increased 2.2 percent to $45.01 as of 4 p.m. in New York. Among the most active contracts were September $55 calls, which are a bet that the shares will rise 23 percent or more from today’s closing price by expiration. About 63 percent of the 5,715 of those options that were exchanged traded at the ask price, an indication buyers initiated most of the transactions.

“Bullish players are dominating trading activity in Akamai Technologies’ options this morning due to reports of renewed takeover chatter,” Caitlin Duffy, an equity options analyst at Greenwich, Connecticut-based Interactive Brokers Group Inc., wrote in a note today.

The most-active contracts were August $45 calls, which more than doubled to 48 cents and accounted for about a fifth of the bullish volume. Investors who bought these calls will make money if Akamai’s shares trade above the break-even price of $45.48 by expiration tomorrow.

Akamai spokesman Jeff Young didn’t immediately return calls requesting comment. The Cambridge, Massachusetts-based company, the largest supplier of software to make online media load faster, is the best performer in the Standard & Poor’s 500 Index this year with a 78 percent gain.

Implied volatility on Akamai jumped 11 percent to 46.80 today. An increase indicates traders anticipate larger swings in the stock price.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net.