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Trader sees end to slide in KB Home

Mike Yamamoto (mike.yamamoto@optionmonster.com)

KB Home has been pulling back after hitting multi-year highs along with other homebuilders, but one large trader apparently believes that the stock will hold current levels.

optionMONSTER's tracking systems detected the sale of 6,500 June 20 puts in a single print for $0.58. This is clearly a new position, as open interest in the strike was just 926 contracts before the trade appeared.

The put sale is looking for KBH to stay above $20 through expiration in mid-June. If shares fall below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)

KBH is up 1.58 percent to $20.51 this morning. The homebuilder had rallied hard along with the rest of the sector but has been falling since mid-May and is now at a support level that goes back to early March.

Total option volume in the name is already more than 8,000 contracts, double its full-session average for the last month.

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