At least one big investor is getting nervous about the
optionMONSTER's Depth Charge tracking system detected a surge of
put volume yesterday in PulteGroup and Ryland as traders braced for
potential pullbacks in the next two months.
Some 26,000 April 8 puts were bought in PHM, mostly for $0.41,
against open interest of just 1,572 contracts. Activity in RYL
focused on the April 18s, which priced for $1.15 as the name saw
almost 13,000 change hands--nearly triple the previous open
These long puts lock in the amount investors will get by selling
shares in the companies, so they
against lower prices. They can also provide significant leverage in
the event of a decline and are safer than simple short-selling of
the stock because the risk is limited to the price of the puts.
PHM rose 0.47 percent to $8.53 yesterday, and RYL gained 0.61
percent to $18.22. Both stocks have been climbing along with other
homebuilders as traders bet that the housing market is finally
starting to improve.
That sentiment could be challenged today when the S&P
Case-Shiller Home Price Index is released at 9 a.m. ET.
Total activity the names was 12 times greater than average for RYL
in the session and 5 times above normal in PHM, according to our
Depth Charge system. The bulk of the option trading occurred in
less than two minutes in both companies, suggesting that it was the
work of a single large investor.
(A version of this post appeared on
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