Traders are bullish on housing stocks, one week before key data on the industry.
optionMONSTER's Heat Seeker monitoring program detected the purchase of almost 3,400 June 38 calls in the SPDR S&P Homebuilder Fund for $0.94. Volume was almost 16 times open interest at the strike, which indicates new money was put to work.
Long calls lock in the price where investors can buy XHB, allowing them to position for a rally at limited cost. They also stand to enjoy significant leverage if it moves in the right direction. (See our Education section)
Traders were active in the in the fund earlier this month and have already made money in the June 37 and June 40 calls .
The XHB is up 0.98 percent to $36.13 in afternoon trading. It is up 9 percent since the middle of January and is back to levels last seen in mid-2007. The exchange-traded fund's holdings include a wide array of companies associated with housing and home ownership, such as Owens Corning, Aaron's, Select Comfort, and USG.
Some of those stocks face potential catalysts next week, with the NAHB homebuilder index due on Tuesday, then housing starts/building permits on Wednesday.
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