Credit: Shutterstock photoLennar has been crumbling along with most other stocks, and one investor is apparently trying to repair a broken trade.
optionMONSTER's tracking programs detected the sale of 13,000 September 13 puts for $0.80. An equal number of September 16 puts were bought at the same time for $3, but volume was below open interest. That suggests that an existing short position had been opened at the higher strike before LEN's recent drop, and now they're adjusting it downward.
The move cost $2.20, but reduces the price at which the investor must buy shares in the Miami-based homebuilder. He or she probably hopes that the stock will now hold its ground or edge higher.
LEN was trading at $13.16 when the transaction occurred, but then pushed lower and ended Friday's session down 4.36 percent to $12.72.
The company's results have been showing signs of improvement despite weakness in the national housing market. Its last earnings report on June 23 beat expectations on the top and bottom lines, thanks to lower land prices and better demand.
Overall options volume in LEN was triple the daily average. Similar activity has been common this month in the wake of the recent market collapse. See this story for more on an especially painful loss in CB Richard Ellis.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
