D.R. Horton Inc. Calls In Play
Shares in homebuilder D.R. Horton Inc. are 10.2% higher at $23.05 challenging the highest trade price since July. Amongst the near 23,000 options in play on Tuesday is a block of calls bought at next month?s expiration at the 25.0 strike. Premiums on the contract reached 23-cents as bulls drove up the value of the company. Last year?s peak for D.R. Horton?s share price was reached at $27.75 in May and it appears that investors are taking advantage of the global turmoil to position for ongoing recovery in the housing sector. The chart below shows that on present pricing, options imply a slim chance that shares will settle above $25.00 at February expiration. The implied chance of shares gaining above the 25.0 strike in a month?s time is 16.37% accounting for the low premium paid for today?s trade. On Monday the call options settled at just 7-cents.
Chart ? IB Probability Lab shows low likelihood of a rally
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