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Tax titan H&R Block, Inc. (HRB) filed its own return Monday, reporting its third-quarter earnings. Specifically, HRB reported per-share profits of 16 cents, a 20% decrease from the same year-ago period. Additionally, HRB refused to provide a full-year outlook, instead tersely warning that 2010 looked grim given the high unemployment levels.
Following Monday's report, option players flocked to the equity, driving volume to double HRB's daily average. Specifically, call volume soared to 5,454 contracts traded -- four times the equity's average daily call volume of 1,200.
The March 17 call received the most attention, with 3,931 contracts changing hands. Overnight, open interest at this strike grew by 2,881 contracts, pointing to the accumulation of fresh positions. What's more, 44% of these calls crossed the tape at the ask price, suggesting a portion of these calls were bought to open.
The International Securities Exchange (ISE) reports that over four calls have been bought to open for every one put during the past 10 trading sessions. This ratio ranks in the 78th annual percentile of readings taken in the past year.
Elsewhere on the street, short interest on HRB has spiked over 18% during the past month, and now accounts for 3.77% of the equity's total available float. Some of the recent call activity could be credited to bears hedging their short positions with calls.