Market Overview

Mike Khouw Sees Unusual Options Activity In Lennar And KB Home


On CNBC's "Options Action", Mike Khouw spoke about options activity in KB Home (NYSE: KBH) and Lennar Corporation (NYSE: LEN). Both companies are scheduled to report earnings on Wednesday and the options market is implying a 6 percent move in either direction for Lennar, which is higher than 3.5 percent that it typically averages after earnings. The implied move in KB Home is 9 percent and it typically averages 5 percent on the event, explained Khouw.

Both companies also had above average put options volume on Tuesday, said Khouw. Lennar traded around 4 times the average put volume and KB Home traded around double its average put volume. Options traders were buying the January 20 puts in KB Home for $0.60. The trade breaks even at $19.40 or 8.14 percent lower. Khouw noticed some hedging in Lennar as somebody was protecting a long position from a move of 10 percent to the downside.

Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media


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