KB Homes (KBH) is off 16 cents to $5.91 and 20000 Oct 8 calls are sold on the homebuider at 13 cents per contract. Open interest is 20,310 and so this might be a closing trade. If so, it exits a position accumulated from Aug 29 to Aug 31 when open interest increased by 19,831 to 20,433 contracts over those three days. At that time, the largest trade was a 3,652-contract block at 21 cents. Shares are down 13.5 percent since Aug 30 and today’s call write seems to reflect diminishing expectations for a move beyond $8 (~35.4%) in KBH through the Oct expiration (42 days).
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.