Investing

Robert Half Sees Bullish Implications With Its Unusual Options Volume

Joshua Enomoto

Published: April 26, 2023 6:50 am

Last Updated: April 26, 2023 12:24 pm

While the share price performance of employment agency Robert Half International (US:RHI) still disappoints stakeholders, potentially bullish rumblings in the screener for unusual stock options volume may bode well for RHI stock. The uptick in activity in the derivatives market comes as more companies across a wide range of industries have announced layoffs.

Specifically, following the close of the April 24 session, call volume for RHI stock hit 557 contracts against an open interest reading of 538. On average, Robert Half sees call volume reach 35 contracts. On the flipside, put volume printed 149 contracts against open interest of 802. Here, the average put volume stands at 50 contracts.

Despite the positive implications, the overall options sentiment for RHI stock presently rings as negative. Per the latest data compiled by Fintel, RHI’s put/call ratio comes out to 1.49. As the investment resource stated, since puts generally represent bearish bets, put/call ratios greater than 1 indicate pessimistic sentiment.

Little Confidence

Admittedly, the performance of RHI stock in the open market hasn’t delivered much in the way of confidence. Since the start of the year, shares gave up 2.57% of equity value. In contrast, the benchmark S&P 500 index gained 6.47% during the same period. As well, RHI suffered an unsightly loss of more than 34% in the past 12 months.

Fundamentally, the negative catalyst stems ironically from the robust labor market. According to the latest Employment Situation Summary provided by the U.S. Bureau of Labor Statistics (BLS), the unemployment rate in March was largely static at 3.5%.

Notably, the BLS remarked that “[b]oth the unemployment rate, at 3.5 percent, and the number of unemployed persons, at 5.8 million, changed little in March. These measures have shown little net movement since early 2022.”

Essentially, those that diligently seek a job can get one. Further, opportunities abound in multiple sectors. “Employment continued to trend up in leisure and hospitality, government, professional and business services, and health care,” stated the BLS.

Cyclical Shift

However, circumstances may be shifting cynically in favor of RHI stock.

Throughout 2022, the technology sector suffered a disproportionate amount of corporate headcount reductions. This year, however, mass layoffs now affect other areas of the economy. Perhaps most worryingly, consumer goods giant Clorox (US:CLX) announced job eliminations. With consumers cutting back on both discretionary goods and the necessities, workers may feel their collars tighten.

As desperation increases, Robert Half may see an uptick in demand for its services. In addition, a Gallup poll last year reported job unhappiness hit an all-time high. By logical deduction, some workers may decide to establish a relationship with Robert Half agents now before the deluge of the recently unemployed flood in.

This article originally appeared on Fintel