The PHLX Housing Sector Index (.HGX) is trading down .35 to 123.61 and volume in the options market is running double the normal. Among today’s top trades, a player bought 5,000 of the October 115 puts and sold 5,000 of the September 100s for $5.15 (per spread) earlier in the trading day. The action is possibly part of a roll or a diagonal spread. The diagonal spread would produce profits if HGX falls and, ideally, to 100 at September options expiration. The sector is under pressure today after Bloomberg reported that one third of all homeowners owe more than their homes are worth. Citing data from zillow.com, Bloomberg says second quarter home prices fell 9.9 percent from last year and, as a result, 29 percent of owners have negative equity. “For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, zillow said”.
Category: All Indexes
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.