Smith & Wesson Holding Corp.'s stock jumped 4.5% in afternoon trade to a more than eight-year high, as investors awaited the gun maker's fiscal second-quarter results due after the closing bell. The stock has soared 16% amid a three-session win streak, with President Barack Obama's call for a modest reduction in the availability of firearms over the weekend helping fuel the gains, by sparking concerns about the potential supply of guns. The options market is prepared for the company's results to produce a lot of volatility in the stock. A strategy known as a straddle, which involves the simultaneous buying of bullish and bearish options, is pricing in a one-day, post-results move of about 9.9%, in either direction; the average move following the past 10 quarterly reports was 7.5%, according to FactSet. The stock is on track to close at the highest level since Oct. 24, 2007. Analysts surveyed by FactSet expect, on average, earnings per share to rise to 20 cents from 9 cents a year ago, and revenue to increase to $138.8 million from $108.4 million.
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