Today’s tickers: EBIX, SINA & COL
EBIX - Ebix, Inc. – Shares in the maker of insurance software products are down sharply today on reports the SEC is investigating the company’s accounting practices. The stock dropped as much as 32% earlier in the session to an intraday low of $15.26, with the shares currently down roughly 21% to stand at $17.68 as of 11:55 a.m. ET. Options on EBIX are more active than usual as some traders scramble in reaction to the big move in the price of the underlying shares. Upside call buying in the November and December expiry options suggest some traders are positioning for EBIX shares to rebound in the near term. Bullish strategists picked up around 170 of the Nov. $18 strike calls for an average premium of $1.20 apiece. These traders may profit at expiration in a couple of weeks in the event that the software maker’s shares rally 8.6% over the current price of $17.68 to top the average breakeven point at $19.20. Like-minded bulls snapped up roughly 200 calls out at the Dec. $15 strike at a premium of $2.00 each. Profits are available to buyers of the Dec. $15 strike calls as long as shares in Ebix, Inc. exceed $17.00 at expiration next month. Not all traders, however, are positioning for a recovery story to play out. Some strategists are trading bearish puts at the Nov. $15 strike, where more than 750 contracts changed hands against zero previously established positions. Meanwhile, out in December expiry puts, it looks like one trader rolled a position in downside puts to a lower striking price. The options player appears to have sold 493 puts at the Dec. $21 strike for a premium of $4.70 apiece in order to buy the same number of puts at the Dec. $15 strike at a premium of $1.70 each. The Dec. $15 strike puts make money if shares in Ebix extend losses ahead of expiration. Ebix, Inc. is scheduled to report third-quarter earnings ahead of the opening bell on Thursday.…
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