EBIX.com is getting slammed and implied volatility in the options on the Atlanta-based business software company is screaming higher after Bloomberg ran a story suggesting the SEC is possibly investigating the company’s accounting practices (Link to Bloomberg Report). EBIX is off $4.85 to $17.56 and falling to 52-week lows on heavy turnover of 4.5 million shares. By way of comparison, average daily volume in EBIX is about 150,000 shares. 3,310 puts and 1,020 calls also traded in the name, which compares to daily average volume of 355 contracts. Nov and Dec 15 puts are the most actives and 30-day ATM implied volatility is up 132 percent to 105.5. Earnings will be reported the morning of Nov 8 (Note that Reuters is reporting the company is not aware of any SEC probe — LINK).
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.