Home builders have been pausing after a big run, and yesterday momentum buyers came back to the group.
OptionMonster's tracking programs detected the purchase of 10,000 May 21 calls on KB Home for $0.65. This is fresh buying, as the volume was almost nine times higher than the open interest in the strike before the session began.
These long calls lock in price where the stock can be purchased no matter how high it might climb. Because they are cheaper than buying shares directly, these options limit the amount money that can be lost if the stock falls, while offering the potential for significant leverage in a rally.