D.R. Horton has cooled off from its scorching run this year, but one trader is betting that it will bounce in coming months.
optionMONSTER's Heat Seeker tracking system detected the purchase of 3,000 February 20 calls in one print for $0.80. The volume was more than 6 times higher than the strike's open interest of 489 contracts at the beginning of the day, clearly indicating fresh buying.
These long calls lock in the price where the stock can be bought and are looking for DHI ot gain roughly 8 percent by mid-February. They can be sold at a profit earlier if premiums rise with a rally before then but will expire worthless if the shares don't move.
DHI is up 3.58 percent to $19.23 in midday trading. The homebuilder had ripped higher with the rest of the sector for more than a year but has pulled back from its highs in the last six weeks.
Only 685 puts have traded in the name so far today, a reflection of the session's bullish sentiment.
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