Learn the trade here. Make it on tradeMONSTER

Options Trading News

July 26, 2013  Fri 3:16 AM CT

PHM: SEE CHART GET CHAIN FIND STRATEGIES
A huge trade is apparently betting on a ceiling in shares of homebuilder PulteGroup, which plunged after reporting poor quarterly results yesterday.

optionMONSTER systems show that a trader sold 20,000 January 19 calls for the bid price of $1.13 against previous open interest of 25,259. At the same time, he or she bought 20,000 January 22 calls for the ask price of $0.52 in volume that was 10 times the open interest at that strike, so it is a new position.

This could be a roll, with the trader closing the lower-strike calls and opening a new position at the higher strike. But given how far both are out of the money, this appears to be credit spread. In that case, the trader is taking in $0.61, which will be kept as profit if PHM remains below $19. (See our Education section)

PHM dropped 10.3 percent to end the session at $16.55, its lowest close since mid-December. The company, which has been hit hard along with other homebuilders because of rising interest rates, fell sharply right out of the gate yesterday after missing second-quarter estimates on the top and bottom lines.
Share this article with your friends


Related Stories

PHM

PulteGroup gets show of support

April 3, 2014

THe homebuider is trying to recover from a sharp drop, and one trader apparently believes that the stock will at least hold current levels.

PHM

Put seller sees a floor for Pulte

March 26, 2014

The homebuilder is back to support from late last year.

Premium Services

Education & Strategy

Options and high-frequency trading

There has been much talk lately of high-frequency trading (HFT) and what it does--or doesn't--mean to the markets and retail...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER