H&R Block has long been a whipping boy for traders because
of its steady loss of customers, but yesterday it showed signs of
The most interesting trade was in the November 13 calls, which saw
a single block of 10,000 bought as the stock dropped but failed to
reach a new intraday low. HRB shares snapped back hard and pushed
higher, finishing the day up 0.94 percent at $11.76.
optionMONSTER's systems show that the calls went for just $0.15, so
this trade was definitely a cheap shot looking for a push back to
the upside over the short term. There is also heavy put selling in
the name, with overall option volume was slightly above the daily
average for HRB.
Short interest in the tax-preparation company was about 11 percent
of the float as of Oct. 15, and it's now trading for about 7 times
forward earnings--numbers that could trigger a squeeze higher.
(A version of this post appeared on InsideOptions yesterday.
Chart courtesy of tradeMONSTER.)
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