Options Traders Blast IHS Markit Stock After Earnings Beat

IHS Markit's third-quarter earnings beat analyst estimates

Deputy Editor
Sep 29, 2020 at 10:13 AM
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The shares of IHS Markit Ltd (NYSE:INFO) are flat today, last seen trading at $79.79. Unable to take advantage of an earnings beat, the information services company reported fiscal third-quarter profits of 77 cents per share, higher than Wall Street's anticipated 69 cents per share. Revenue, meanwhile, was directly in line with analysts' forecasts, and the company said its recovering at "varying speeds" within the markets it serves. The company also reaffirmed its 2020 full-year guidance.

On the charts, IHS Markit stock is pulling back after nearing all-time highs at the beginning of the month. INFO still boasts a 19.8% year-over-year lead, the recent choppy price action has been contained by the shares' 100-day moving average.  

INFO's options pits are skewed toward calls, despite limited absolute volume. In fact, the equity sports a 50-day call/put volume ratio of 4.95 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). That ratio sits in the elevated 86th percentile of readings from the past 12 months, implying a healthier-than-usual appetite for long calls of late.

Today is more of the same. Calls are trading at 10 times the average intraday amount and volume is pacing for the 99th percentile of its annual range. Most popular is the October 85 call, with new positions being opened.

Investors looking to get in on IHS Markit stock's next move higher may want to consider doing so with options. The security's Schaeffer's Volatility Index (SVI) of 35% sits in the relatively low 20th percentile of its annual range. In other words, option traders are pricing in relatively low volatility expectations at the moment.


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