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A Look At Zix Corporation Through Benzinga's Securities Lending Volatility Index

Christopher Sappo

Benzinga’s Securities Lending Volatility Index (SLVX) Powered by Tidal Markets, is an indicator that forecasts stock market activity for broader indices and individual securities.

As a demonstration of the use of the SLVX as a stock market indicator, observe how changes in the SLVX anticipated a -16.14% decline in Zix Corporation (NASDAQ: ZIXI) over eight trading days in the first half of May 2019.

Zix Corporation provides email encryption, data loss prevention, threat protection, archiving, and bring-your-own-device mobile security solutions for the healthcare, financial services, insurance, and government sectors, primarily for companies in the United States.

At the beginning of May, ZIXI experienced a strong price rally. The stock gained 25.83 percent between May 2nd and 3rd as a result of a strong earnings report.

After the spike in share price, the SLVX immediately jumped. Volatility in ZIXI increased more than 300 percent, denoting a strong likelihood of an impending pullback.

On the following trading day, ZIXI fell -5.68 percent. However, the SLVX was still growing. Despite what seemed like a bounce-back in share price between May 8th and 9th, the SLVX remained high.

As the SLVX had indicated ZIXI continued its descent through the following trading days.

From the start of our analysis on May 3rd, the SLVX reflected a volatility rate of 3.768. That was below their first-quarter average SLVX volatility of 4.02. As ZIXI quickly rose in price following its earnings release, SLVX jumped to 9.089 on May 6th, and 11.301 on May 7th.

Date

ZIXI

SLVX

5/3/2019

$               11.08

3.768

5/6/2019

$               10.45

9.089

5/7/2019

$               10.27

11.301

5/8/2019

$               10.42

6.387

5/9/2019

$               10.61

5.670

5/10/2019

$               10.49

3.789

5/13/2019

$               9.61

2.579

5/14/2019

$               9.54

2.346

Figure 1

 

zixi.jpg


Figure 2

Between May 3rd and May 14th, Zix Corporation lost -16.14 percent, or $1.54 per share, over an eight-day stretch. Meanwhile, the SLVX saw the volatility of ZIXI and climbed above 11 during the stock's ascent, before falling in volatility as the share price of ZIXI continued to fall.

As we continue to watch SLVX values of ZIXI into the last week of May, we’ve seen volatility values plateau. Expect to see a rebound in ZIXI and a potential buy-back opportunity in the near future if the SLVX continues to remain at muted levels,

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