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Options Trading News

October 2, 2013  Wed 9:31 AM CT

HRB: SEE CHART GET CHAIN FIND STRATEGIES
H&R Block is seeing positive option activity for the second day in a row as the stock comes off seven-month lows.

Yesterday traders were buying November 27 calls, and today they are selling October 27 puts. More than 4,400 of those puts have changed hands, with the big block of 3,623 sold for the bid price of $0.35. This volume was twice the strike's previous open interest, so it is clearly a new position.

The put seller is looking for HRB to hold above $27 through expiration. The trader also takes on the risk of having to buy shares if they are below that strike price. (See our Education section)

HRB is down 1.04 percent to $27.57. The tax-preparation service was down at $26 into Monday, its lowest levels since the start of March. Shares were at a high of $32 two months ago.

Total option volume already tops 4,500 contracts, compared to a full-session average of 2,695 for the last month.
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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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