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Options Action: DR Horton

As the foreclosure crisis threatens homebuilders, how should you play homebuilding company DR Horton ?

Michael Khouw, senior equity derivatives strategist at Cantor Fitzgerald, has an idea using options. Khouw explained how you can make a bearish bet without having to laying out a lot of premium.

To learn more about this trade, watch the video!

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Trader disclosure: On Oct. 20, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Cortes is short crude oil; Cortes is short gold; Cortes is short (BIDU); Cortes is short (RSX); Cortes owns U.S. Treasuries; Cortes owns the S&P 500; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Jon Najarian owns (AAPL) calls; Jon Najarian owns (BA) calls; Jon Najarian owns (GS) calls; Jon Najarian owns (NFLX) calls; Jon Najarian owns (PAAS) puts; Finerman owns (AAPL); Finerman and Finerman’s firm owns (BAC); Finerman and Finerman’s firm owns (JPM); Finerman and Finerman’s firm owns (GOOG); Finerman’s firm owns (IBM); Finerman’s firm owns (HPQ); Finerman’s firm owns (MSFT); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts

For Brian Kelly:
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (SGG)
Accounts managed by Kanundrum Capital own (POT)
Accounts managed by Kanundrum Capital own (JJG)
Accounts managed by Kanundrum Capital own (JO)
Accounts managed by Kanundrum Capital own (UUP)
Accounts managed by Kanundrum Capital own (REE)
Accounts managed by Kanundrum Capital own (MCP)
Accounts managed by Kanundrum Capital own (JEF)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own the Swiss Franc
Accounts managed by Kanundrum Capital are short the UK Pound
Accounts managed by Kanundrum Capital are short the Mexican Peso

For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (BA) for clients
Edwards owns (EBAY) for clients
Edwards owns (FCX) for clients
Edwards owns (GS) for clients
Edwards owns (JPM) for clients
Edwards owns (MAT) for clients
Edwards owns (USB) for clients

For Eric Jackson
***No Disclosures***

For Peter Misek
Jefferies makes a market in (AAPL)

For Charles Biderman
***No Disclosures***

For Stephen Weiss
***No Disclosures***

For Mike Khouw
***No Disclosures***

CNBC.com with wires.

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