Carter Worth And Mike Khouw's IYR Trade

On CNBC's "Options Action," Carter Worth shared with the viewers his bullish technical analysis of iShares US Real Estate ETF IYR. He said that 70% to 80% of stocks in the S&P 500 have gotten back above their pre-pandemic levels, but REITs as a sector are just now approaching the level before the plunge.

After a long period of underperformance relative to the S&P 500, IYR is starting to show some bottoming signs and it's starting to outperform the market. On an absolute basis, the ETF is sitting right on the high and Worth expects it to break out to the upside. He would take a long position in the name.

Mike Khouw wants to use a risk reversal strategy in IYR. He wants to sell the July $96 put for a dollar and use the proceeds to buy the July $102 call for a dollar. The trade breaks even at $102 or 1.81% above the closing price on Friday. If the stock drops 4.18% at the July expiration, Khouw would have to buy the stock at $96.

Posted In: CNBCMike KhouwOptions ActionSector ETFsOptionsMarketsMediaETFsReal Estate

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