Housing bulls turn to Beazer Homes


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Homebuilders have been grabbing attention in recent sessions, and one big investor is focusing on Beazer Homes.

optionMONSTER's trade scanners detected the sale of 4,000 December 20 puts for $0.18 today in volume far above open interest of just 662 contracts, clearly showing that this is a new position. The trade really stands out in a name that usually sees only about 2,000 contracts change hands per session.

Selling puts obligates the investor to buy shares in the Atlanta-based company for $20 if they're below that level upon expiration at the end of next week. Above $20, he or she would keep the premium as the options expire worthless. (See our Education section)

BZH is up fractionally at $20.85 in afternoon trading. It came into the day up 11 percent in the last six months, outpacing every other homebuilder tracked by our researchLAB analysis tool as shown on the graphic below. The industry group has been lagging the broader market since the spring as investors worry that higher interest rates will hurt business. Nonetheless, earnings have mostly been strong.

The bulls have also targeted other companies in the space: D.R. Horton and Toll Brothers saw call buying yesterday , and today upside activity occurred today in Hovnanian and KB Home.

(Graphic courtesy of researchLAB )

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

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This article appears in: Investing , Options

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