Pulte Homes (PHM) is off 94 cents to $15.23 amid ongoing weakness in the builders. The sector took a hit Friday on the heels of disapointing results from DHI and BZH. SPDR Homebuilder Trust (XHB) is down nearly 3 percent today and off 8.2 percent in the past 8 days. Recent options trades seem to reflect a contrarian view of the situation. A sweep of 1714 Nov 25 calls recently traded on XHB for 11 cents and 1641 contracts for 11 cents. Just a few minutes ealier, a 4300-lot of Dec 19 calls was bought on PHM. 5,600 now traded. Dec 20, Nov 15, Nov 17 and Dec 17 calls on Pulte Group are also actively traded. Total volume is now 25,000 calls and 7,765 puts. TOL and KBH are also seeing a relatively high ratio of calls to puts traded today. So, the flow is possibly part of a play on the broader sector after the recent decline.
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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.