Homebuilders have been bulletproof recently, and yesterday the
bulls moved into Toll Brothers.
Our Heat Seeker tracking program detected heavy buying in the May
25 calls, which initially priced for $1.40. They later fetched as
much as $2.15 as the stock pushed higher throughout the session.
lock in the price investors must pay to buy the stock. That gives
them considerable leverage relative to the underlying share price.
For example, TOL swung less than 7 percent in the course of
yesterday's session, but those options appreciated by more than 50
percent. (See our
The stock has remained strong all year and barely flinched as
European worries caused the S&P 500 to swoon in recent
sessions. Most companies in
and related businesses, including
and suppliers of
, have also outperformed.
TOL closed at $26.96, up 3.37 percent on the day. At one point in
the session the stock touched its highest price since September
Overall option volume was 5 times greater than average yesterday,
with calls outnumbering puts by more than 10 to 1.
(A version of this post appeared on