PulteGroup is seeing heavy put activity as the homebuilder's shares fall fast in midday trading.
PHM is down 2.67 percent today at $8.74. This leaves the stock back to Wednesday's close, when it rebounded from support around $7.60. Shares ran from a 52-week low of $3.29 in early October to a 52-week high of $10.82 at the start of May.
Already today 50,000 options have traded in the name, compared with a daily average of 5,600. All but 500 of those contracts are puts.
A trader sold 24,500 June 8 puts for the bid price of $0.06 against open interest of 48,959 and bought 24,500 October 8 puts for the ask of $0.94, according to optionMONSTER's systems. The open interest at the latter strike was just 689 contracts, so the trade was opening a new position.
This activity appears to be rolling a long-put position from June to October to buy more time for time for the trade to work. The trade could be an outright bearish bet that PHM shares will fall back to where they were trading last week, or it could be a hedge against long shares to protect against such a pullback. (See our Education section)
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