Short Sellers, Put Players Bet Against H&R Block
Sarah Wasserman (swasserman@sir-inc.com)
2/22/2011 1:42:37 PM
Tax titan H&R Block, Inc. (HRB) has attracted option players' attention today, with nearly 9,500 contracts changing hands -- triple the equity's average daily option volume. Puts have been especially popular, with over 7,700 of these typically bearish bets crossing the tape.
At the center of today's activity is HRB's April 13 put, with 5,293 contracts exchanged -- the bulk of which traded at the ask price, suggesting that they were likely purchased. What's more, with today's volume outnumbering open interest at this strike, it appears that fresh bearish positions are being added at this back-month contract. By buying to open HRB's April 13 put, option speculators are betting on the tax services stock to backpedal below the $13 level over the next two months.
Technically speaking, HRB has actually done quite well in 2011, advancing over 22% year-to-date. However, as a result of this rapid ascent, HRB's Relative Strength Index (RSI) now stands at 74, suggesting that the stock is short-term overbought, and could be due to consolidate some of its recent gains.
In fact, it seems that the shorts are also betting on a pullback by HRB. Short interest jumped by 3.2% during the past month, and now accounts for over 11% of the equity's total available float.
At last check, HRB was trading around $14.26.
At the center of today's activity is HRB's April 13 put, with 5,293 contracts exchanged -- the bulk of which traded at the ask price, suggesting that they were likely purchased. What's more, with today's volume outnumbering open interest at this strike, it appears that fresh bearish positions are being added at this back-month contract. By buying to open HRB's April 13 put, option speculators are betting on the tax services stock to backpedal below the $13 level over the next two months.
Technically speaking, HRB has actually done quite well in 2011, advancing over 22% year-to-date. However, as a result of this rapid ascent, HRB's Relative Strength Index (RSI) now stands at 74, suggesting that the stock is short-term overbought, and could be due to consolidate some of its recent gains.
In fact, it seems that the shorts are also betting on a pullback by HRB. Short interest jumped by 3.2% during the past month, and now accounts for over 11% of the equity's total available float.
At last check, HRB was trading around $14.26.
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