Housing bulls are turning to Masco

By David Russell,

Shutterstock photo

Housing stocks have been active lately, and yesterday the bulls targeted building-materials company Masco.

optionMONSTER's Heat Seeker tracking program detected unusual activity in the name, which produces cabinets, faucets, and paint. Traders initially purchased the May 21 calls as cheap shots for $0.10 and $0.15, some 5,000 of those eventually changed hands in volume well above previous open interest of 948 contracts. The June 21s followed soon after, with more than 2,000 pricing for $0.60.

Long calls lock in the price where a stock can be purchased, letting investors position for a rally with limited risk. They can also generate significant leverage if shares move in the right direction. (See our Education section)

MAS rose 0.05 percent to $20.62 yesterday and is bouncing back from a poor earnings report late last month. Related names including D.R. Horton and PulteGroup , which build homes, have also seen bullish trades in recent sessions.

Total option volume in MAS yesterday was quadruple its daily average, with calls outnumbering puts by more than 20 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: MAS

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com