HRB calls have been extremely popular over the last 10 weeks
The shares of H & R Block Inc (NYSE: HRB) are on the rise today, up 2.7% at $14.64 at last check. This small jump comes a few days ahead of H&R Block's fiscal first-quarter report, which
is due after the close Tuesday, September 1. Ahead of the event, we will take a look at how the stock has performed on the charts of late, and explore some of the activity surrounding HRB ahead of the event.
On the charts, HRB is in a 45.8% year-over-year slump, and has traded between $13 and $16 since late June. Additionally, the latter turned away a potential rally for the equity, that would would have also seen HRB close above its 80-day moving average for the first time in over two months. It's worth noting, however, that H & R Block stock is trading slightly above its quarter-to-date breakeven levels.
Meanwhile, analysts are approaching HRB with caution. Of the six in coverage, four rate the equity a tepid "hold," though the remaining two recommend a "strong buy." Plus, the current target price of $18.17 is a 27.4% premium to current levels.
Still, calls are ruling the roost in HRB's options pits. This is per the equity's 50-day call/put volume ratio of 7.13 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in he highest percentile of readings from the past year, meaning long calls are being picked up at a faster-than-usual pace.
A look at HRB's history of post-earnings reactions shows a mixed response. In fact, four of the last eight consecutive reports have ended their next-day sessions lower -- including a 9.5% drop back in June. During this two-year time frame, the security has averaged a post-earnings swing of 3.9%, regardless of direction. This time around, the options market is pricing in a much higher move of 8.9%.