KB Home is up nearly 6 percent along with heavy options activity, as traders may be thinking that housing prices are finally hitting bottom.

The homebuilder has averaged volume of just over 3,000 calls a day in the last two weeks but traded more than 10,500 contracts in the first hour of the session Tuesday morning. The bulk of the trade was a large bull call spread, in which the buyer grabbed about 3,000 June 15 calls and sold about 5,000 of the June 17.50 calls for a net of $1.10.