Strong foundation seen for KB Home
Mike Yamamoto | firstname.lastname@example.org
About 19,000 July 14 puts were sold yesterday, including 13,200 that traded at the same second for $0.30, according to optionMONSTER's tracking systems. Open interest in the strike was a mere 310 contracts before the trading began, clearly showing that these are new positions.
These put sellers are looking for the homebuilder to stay above the $14 strike price through expiration in mid-July. If KBH drops below that level--a decline of about 29 percent from yesterday's close--the traders will face the obligation to buy the shares. (See our Education section)
KBH rose 5.76 percent yesterday to $19.64 after peaking at $20.04 earlier in the session, the first time it has breached the $20 mark since April 2010. Total option volume in the name exceeded 41,000 contracts yesterday, more than triple its daily average for the last month.