Shares of The iShares Dow Jones US Home Construction Index Fund (ITB) are trading higher on the session by 3.64%, at $20.77. The ETF has pushed higher over the past few days, touching a fresh two-year high this morning.
With a strong consolidation in place, as well as upward-trending moving averages, further upside looks likely here. One trader is buying protection, however. A short while ago, the April 2013 $20.00 put was purchased 5,000 times, on or near the offer, for $1.60. With open interest of only 10 contracts, this is clearly new positioning.
The trade has pushed overall put volume to 8x normal volume.
There is an interesting divergence happening in ITB?s volatility, though. 30-day implied vol is off 3.7% today, to 27.82%, while 10-day realized vol and 30-day realized vol are both trading above that level, at 32.46% and 29.14% respectively. At $1.60, the Apr13 $20 put traded at 33% vol.
The iShares Dow Jones US Home Construction Index Fund seeks investment results that correspond generally to the price and yield performance before fees and expenses of the Dow Jones US Select Home Construction Index.