Thursday, December 3, 2009

Jackson Hewitt (JTX) - Vega Buyers + Vol Increase + Earnings Approaching

JTX is trading ~4.15 with earnings 12/9 (BMO). The IV30TM is up about 11%today as well. You can see the Livevol Pro Summary below

You can generally expect a vol increase into earnings, but JTX has shown large vol increases of late. You can see the Charts Tab below - I look at IV30TM vs. HV20TM. Note the recent vol increase (click image to enlarge).

There have been some interesting trades of late. You can see below on the Level II window the open interest chart on the Apr 5 Calls (click image to enlarge). Note the open interest jump:
12/1/09: 2,133
12/2/2009 13,692

Going to Time and Sales Tab (below: click image to enlarge) I have selected all the trades over 250 contracts on that date (12/1) in those calls. You can see they were predominantly purchases (green is trading on the offer - ususally cust buying).

The Jan 5 calls also have a large OI of ~10,800. So what's up?

Well, vol is increasing, earnings are coming up, opening long vega positions a plenty, increased option action (the company only averages 735 contracts a day - over 15x traded recently). Might be worth a look.

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