Mike Khouw Sees Unusual Options Activity In H & R Block Inc
The activity started on Tuesday, he explained, and with a big volume in call spreads, it looked like traders started to roll over their long positions in the October 29 contracts into the November 32 contracts.
The action continued with increased volume in the January 32 call options on Wednesday, Thursday and Friday. Open interest increased significantly in this name last week.
Khouw said the increased activity is interesting because there was also a lot of volatility in stock trading, and traders usually don't pay much attention to tax preparation stocks.
H & R Block Inc is trading relatively inexpensively at 15 times earnings, and the Affordable Care Act could be a good catalyst for shares to move higher because of its potential implications for tax returns.
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