Home On the Range Extention

• Posted by Adam Warner
• on October 23rd, 2009

Looks like somebody’s bunny likes the homebuilders. 126,799 Nov 16 calls traded yesterday, apparently on the offer. Hat tip Steve Smith on Minyanville.

How big is that?

Well, open interest on the line heading into the day was 7379. Open interest in all November calls combined was only about 13K. The high call of any expiration was the Dec. 16′s at 43K, so this is literally off the charts.

Now of course we have some qualifiers. They closed 35 cent bid/at 40 cents, so you’re not talking a gigantic dollar investment here. Nor are you talking high volatility. As you can see on the chart here XHB options trade like pretty much the entire universe, at 52 week lows.

Front running housing starts? Buyers ahead of a Dick Bove upgrade so they can fade into his afternoon downgrade? We’ll find out I guess.

 

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