Traders are looking for the iShares U.S. Home Construction Fund to rally in the next six months.
optionMONSTER's Heat Seeker system detected the purchase of 2,050 October 29 calls in one print for $1.25 and 1,672 October 30 calls at the same second for $0.95. These are new positions, as volume was far above previous open interest in each strike.
These long calls lock in the price where the stock can be purchased through mid-October no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will lose value if shares drop. (See our Education section)
This follows buying in the July 28 calls, which were cited on our InsideOptions Pro subscription service on Feb. 4 . The prices of those contracts rose more than 50 percent by the end of that month.
The ITB fell 1.55 percent to $27.23 yesterday. The exchange-traded fund rallied hard after bouncing off its 100-day moving average in mid-January, but shares have pulled back from a recent high of $28.22 reached on Feb. 24.
Yesterday's total option volume in the fund was triple its daily average for the last month. Overall calls outnumbered puts by more than 7 to 1.
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