Traders are betting that Standard Pacific will hold its recent gains.
Nearly 7,000 February 7 puts were sold mostly for $0.15 on Friday, according to optionMONSTER's tracking systems. These are clearly new positions, as open interest in the strike was just 359 contracts before the trades occurred.
The put sellers collect that $0.15 premium and are looking for SPF to stay above $7 through expiration at the end of next week. If the stock falls below that strike price, the traders will be on the hook to buy shares at that level. (See our Education section)
SPF rose 6.35 percent to $7.70 on Friday, bucking the selloff in the broader market. It is back near its 200-day moving average, which served as resistance when the stock pulled back sharply in mid-January.
The California-based homebuilder beat fourth-quarter earnings and revenue estimates Thursday evening, and shares jumped during the company's conference call with analysts on Friday. The trading, which coincided with call buying in PulteGroup in the session, follows bullish option activity in the D.R. Horton , the SPDR S&P Homebuilders Fund , and the iShares U.S. Home Construction Fund cited on our InsideOptions Pro subscription service last week.
Friday's put selling pushed total option volume in SPF above 7,700 in the session, compared to a daily average of just 188 contracts for the last month.
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