MDC Holdings (MDC), a Denver-based home construction and financial services company, is down 48 cents to $27.55 and options volume is 10X the average daily, led by buyers of July and Jan 25 puts. The top trade is a block of 5712 Jan 25 puts at the $2.50 asking price, which might be closing because open interest is 8809 and currently the largest of any MDC contract. However, 1704 Jul 25 puts traded (94 percent Ask) vs. 181 in open interest and ISEE data (at 75 percent or 1341 contracts) confirm that customers are buying to open new put positions. Implied volatility rose 5 percent to 41.5. Shares are down nearly 30 percent since early May amid ongoing worries about the housing market.
About the Author (Author Profile)
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.