Traders Bet On More Pain Ahead For Homebuilders

Homebuilder stocks declined for the fifth consecutive day on Thursday, with U.S. mortgage rates spiking to 5.78%, the highest since 1987.

On CNBC's "Options Action," Michael Khouw of Optimize Advisors said the SPDR S&P Homebuilders ETF XHB traded 5 times its average daily put volume on Thursday.

Check out homebuilder stocks making big moves in the premarket.

There was a buyer of 4,000 of the July 50/45 at $1.15 per contract on average, Khouw mentioned. The trader sees SPDR S&P Homebuilders ETF declining by at least 14% by July expiration, he added.

XHB Price Action: SPDR S&P Homebuilders ETF declined nearly 7% on Thursday and has lost over 38% year-to-date.

Posted In: CNBCMichael KhouwOptimize AdvisorsShort IdeasOptionsMarketsMediaTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.