Upside bet on D.R. Horton quarter
Traders are looking for D.R. Horton to break out after the homebuilder reports earnings tomorrow morning.
optionMONSTER's Heat Seeker system detected the purchased of 8,272 Weekly 27.50 calls expiring on Friday for the ask price of $1.80. This is clearly a new position, as open interest in the strike was just 190 contracts before the trade appeared.
These long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. But the contracts can quickly lose value if the stock stalls or pulls back. (See our Education section)
DHI is up 2.28 percent to $28.68 in afternoon trading. The homebuilder has been trading sideways in a tight range since reaching an eight-year high of $29.29 on April 6.
Total option volume in the name tops 15,200, more than double its full-session average for the last month. Overall calls are outnumbering puts by a bullish 10-to-1 ratio so far.
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