Bearish Option Activity Alert: LEN/PHM

Bearish Option Activity Alert: LEN/PHM

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Both Lennar Corp. (LEN) and PulteGroup (PHM), two of the U.S. largest residential homebuilders, have seen early Put activity this morning with investors buying downside protection for the next 2-3 months.

LEN ($14.34) sees a block of 6k Jan.11í 12.5 Puts purchased for $.59. Total volume in this strike has now surpassed 10k contracts with all the activity on the offers and nearly doubling current open interest. Implied vol rises 2% with this buying activity.

PHM ($8.09) sees 5k Jan.11í 7.5 Puts purchased for $.55 with total volume in the strike passing 11k contracts, again doubling open interest, and pushing implied vol up over 6%. The Dec. 7.5 Puts are also receiving interest with 5k contracts trading with 75% taking place on the offers and almost all opening.

About Patrick (Rick) Mortimer

Patrick(Rick)Mortimer is the Director of Options Trading at Pipeline Trading Systems LLC. With over 25 years of options trading experience as a Broker/Market Maker on the Philadelphia Stock Exchange he now provides daily insight into today’s complicated world of equity options trading. His daily alerts and commentary are valued by institutional asset managers and hedge funds and he is often quoted by well known financial news providers such as Bloomberg, CNBC, and Reuters. Pipeline’s equity and options clients have found his analysis useful in providing option strategy’s to increase alpha for current equity holdings as well as forecasting directional stock movement based on the underlying option activity.