Options Trading News

January 22, 2014  Wed 3:47 AM CT

Traders apparently believe that homebuilder PulteGroup will hold current levels through its earnings report next week.

optionMONSTER's tracking systems detected the sale of nearly 3,000 Weekly 19 puts that expire on Jan. 31, mostly priced for $0.54 and $0.53. These are clearly new positions, as volume was far above the strike's previous open interest of just 385 contracts.

These put sellers are looking for PHM to stay above $19 through expiration at the end of next week. But if the stock slips below that strike price, the traders will be on the hook to buy shares at that level. (See our Education section)

The company is scheduled to report fourth-quarter results before the market opens on Jan. 30, the day before those Weekly puts expire.

PHM fell 0.83 percent to $19.20 yesterday, right at its 30-day moving average. The stock had been trending higher since hitting a 52-week low of $14.23 last August, but it has been drifting lower this month.

Yesterday's put sale pushed PulteGroup's total option volume above 9,100 contracts, more than double its daily average for the last month.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »