Market News

September 13, 2013  Fri 11:06 AM CT

Put selling appears to be the trade of the day, as seen in homebuilder D.R. Horton this morning.

optionMONSTER systems show that a trader sold 2,525 October 19 puts for the bid price of $0.19. This s clearly a new position, as the volume was 5 times the previous open interest.

The put seller is looking for DHI to hold above $19 through the October expiration in five weeks. The risk is the obligation to buy shares if shares fall below that level. (See our Education section)

DHI is down 2.27 percent to $18.92. It was at a 52-week low of $17.52 last week but at a high of $27.75 in mid-May.
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Education & Strategy

Using puts to BUY stock

Puts are an options contract that gives buyers the right to sell their stock for a set price on or before a future date. However, puts can also be an effective way to BUY stock.

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