Learn the trade here. Make it on tradeMONSTER

Options Trading News

January 15, 2013  Tue 1:47 AM CT

ITB: SEE CHART GET CHAIN FIND STRATEGIES
The iShares Dow Jones U.S. Home Construction Fund is at multi-year highs, and one trader is looking for more gains by early summer.

A trader bought 2,000 July 23 calls for $1.39 and sold 4,000 July 25 calls for the bid price of $0.65, according to optionMONSTER systems. The volume at each strike was above the previous open interest, so this is new a new position.

This vertical spread costs the trader just $0.09, which will be lost if the ITB is below $23 at expiration. The maximum gain in this position, also known as a ratio spread because of the differing number of contracts at each strike, would come if the fund is around $25 at expiration. (See our Education section)

The ITB finished yesterday at $22.06, down 0.7 percent on the session. The exchange-traded fund hit a 52-week low of $13 about a year ago but last week saw its highest close in five years at $22.33.

More than 7,500 ITB options changed hands overall yesterday, compared with a daily average of 1,200. The bullish trade stood in marked contrast to put buying in many other homebuilding names yesterday.
Share this article with your friends


Related Stories

ITB

Calls constructive on homebuilders

July 31, 2014

The iShares U.S. Home Construction Fund fell sharply after poor housing data late last week, but traders are looking for a rebound soon.

Premium Services

Education & Strategy

It's all skewed up

Most new option traders know little about implied volatility, and learn the hard way. Today we want to help you...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER