Post earnings season call buying is in full swing, and usually our favorite time to jump on the call buying bandwagon. But you have to be a little more cautious with the market sentiment so wishy washy. One big call buy that caught our attention today was in H & R Block Inc (HRB).
A wily trader just bought over 2,000 September $32 calls in H & R Block Inc (HRB), paying $1.30 for them. This is over 3 times the usual volume in HRB options. Something is up.
H & R Block Inc (HRB) is currently trading at $32.30 as we head into the lunch hour, up 12 cents on the day, on much lower than average volume of 320,000 shares. HRB has a fairly tight trading range over the past year, with a 52 week low of $26 and a 52 week high of $33.65. This one trader clearly thinks it’s HRB’s time to break out of that range. And he expects it to happen fairly soon.
H & R Block Inc (HRB) is set to announce quarterly earnings on September 2, before the market opens. It’s possible this call buyer is “anticipating” stellar numbers from the tax prep company. By anticipating, we mean knows first hand.
This call buy comes just a few days after an insider sold 5,000 shares of HRB. Interesting?
A total of 7 analysts cover the stock with an average rating of BUY, and an average price target of $37. It could very well be this buyer is in the know about an impending upgrade and or price target raise. By in the know, we mean they are the analyst about to announce the upgrade.
It’s a little disconcerting to see such anemic volume in the face of a large call buy like this. We may have to a bit more research before we jump on this call buyers bandwagon.