Option Bulls Build on Toll Brothers
Shares of Toll Brothers have leveled off after a four-month run, and bulls are targeting the luxury homebuilder on the recent pullback.
OptionMonster's tracking systems show that 4,668 Feb. 21 calls traded in a strong buying pattern yesterday for $1.65 to $1.80. The previous open interest at the strike was just 103 contracts, so the trades were opening new positions.
Toll's stock closed at $22.46, up 2.98 percent on the day and more than 70 percent since its 52-week low on Oct. 4. The shares began to pull back after hitting its 52-week high of $23.68 on Jan. 18 but seem to have found support around the $22 level.
For the calls purchased yesterday to turn a profit, the stock would need to gain some 1.5 percent before the options expire on Feb. 17.
Overall option volume in the name was more than four times its daily average. Calls at all strikes outnumbered puts by more than 7 to 1, a reflection of the bullish sentiment.
—Russell has no positions in TOL.
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David Russell is a reporter and writer for OptionMonster.