Put volume jumped yesterday on AngloGold Ashanti Limited , with activity surging to twice the expected level in the wake of the mining issue's third-quarter earnings report. During the course of the session, traders on the International Securities Exchange (ISE) bought to open 2,336 puts on AU, compared to just 99 calls. The stock's single-day put/call volume ratio of 23.60 reveals a clear preference for bearish bets over their bullish counterparts.

In fact, AU's put options have rarely been in greater demand among speculators on the ISE. The stock's 10-day ISE put/call volume ratio stands at 4.12, with puts bought to open more than quadrupling calls during the past two weeks. This ratio ranks higher than 99.1% of other such readings taken within the previous year, marking a near-peak of pessimistic option activity on the exchange.

As a result of the recent trend toward puts, AU's Schaeffer's put/call open interest ratio (SOIR) has shot higher from its Oct. 19 post-expiration perch of 0.47, which marked an annual low for the indicator. Today, the equity's SOIR arrived at 0.55, in the 10th annual percentile -- revealing that skepticism is on the rise, and there's still plenty of room for the pendulum to keep swinging toward the bearish end of the sentiment spectrum.

In the front-month series, peak put open interest of 4,009 contracts lies at the 40 strike. Meanwhile, AU's November 45 strike is home to peak call open interest of 6,480 contracts. With the stock trading just fractionally above $40 at last check, both bullish and bearish bettors are favoring out-of-the-money options. This points to widespread expectations for a noteworthy price change in the shares prior to expiration.

Just as option players are taking a pessimistic stance toward AU, short sellers are also increasing their bets on the stock's decline. Short interest surged by 25.8% during the most recent reporting period, and now accounts for 1.1% of the equity's available float. This is currently a rather slim accumulation of shorted shares, but a continuation of this activity could keep AU under pressure during the near term.

Zeroing in on Monday's trading, the most active put was the January 2010 35 strike. This option saw 1,075 contracts cross the tape, sending implied volatility up 1.6%. However, open interest on this back-month put fell overnight from 6,103 contracts to 6,083 contracts, suggesting that some traders liquidated their positions here yesterday. These puts were not in the money at any point during yesterday's session, so it's possible that traders were buying to close sold puts at this strike.

The day's option activity followed AU's confession Monday morning that it swallowed a third-quarter loss of $1.06 billion. The South African gold producer exited a number of forward sales contracts during the quarter, investing $797 million to restructure its hedge book in the face of soaring gold prices.

On the charts, AU was up more than 7% at last check, with the equity adding to its year-to-date gain of 36.2%. The recent burst of positive momentum is a nice change of pace for the stock, which has underperformed the broader S&P 500 Index (SPX) by nearly 15 percentage points during the past 20 days.

Thanks to its rebound this week, AU is once again perched on support at its 20-week and 32-week moving averages. These two trendlines were breached on a weekly closing basis last Friday for the first time in almost a year, but they should now resume their role as a double-barreled technical backstop. However, the stock has yet to reclaim its shorter-term 10-week moving average.

While AU is also enjoying the support of its 10-month moving average, the round-number $40 region has posed a technical challenge. The stock has managed just two monthly closes above this area in 2009, despite multiple attempts in recent months. Meanwhile, not far beyond that is the $45 level, which has capped the equity's brief journeys north of $40. AU's annual high currently stands at $46.56, which could add to the stock's struggles in this neighborhood.

In general, the predominance of pessimism among option players and short sellers is encouraging in light of AU's year-to-date uptrend, because it signals that not everyone has bought into the stock yet. However, with multiple layers of resistance looming directly overhead, now is definitely an inopportune time to pull the trigger on a bullish trade.