D.R. Horton, Inc. (NYSE: DHI) rarely makes a splash on the most active option contracts. So when you see a contract volume of 70,186 contracts traded in the April 2012 $14.00 Put options it is a bit of a wonder. The prior open interest was a mere 511 contracts.
With a move higher of 4.1% to $14.57 today. investors need to understand that this options contract volume represents 7 million shares of stock on a fully leveraged basis. That is a full day’s worth of an average trading volume.
The 9% gain in Hovnanian Enterprises, Inc. (NYSE: HOV) has the homebuilders on the move, but this one stands out above and beyond normal in options trading.
Lennar Corporation (NYSE: LEN) and KB Home (NYSE: KBH) appear to have above normal trading volume in its options, but not by much when you consider the D.R. Horton put volume. Toll Brothers Inc. (NYSE: TOL) is up 3% in its stock but the options trading is very muted today.
Someone has made some big hedging in D.R. Horton by the looks of it. Stay tuned.
JON C. OGG
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