Put Options on DHI on 8/13/2013

D.R. Horton (DHI) operates as a homebuilding company. The company engages in the acquisition and development of land; and construction and sale of residential homes in 26 states and 77 markets in the United States primarily under the D.R. Horton, America’s Builder name.

It builds traditional single-family detached homes; and attached homes, such as town homes, duplexes, triplexes, and condominiums. The company markets and sells its homes primarily through independent real estate brokers. It is also involved in the origination and sale of mortgages, as well as provision of title insurance policies, and examination and closing services primarily to the purchasers of its homes.

Shares have been heading lower in a "decensding triangle" and lower share prices are expected,

52-Week Trading Range:   $17.71 - $27.75

Last Trade:  $18.50

Here is the trade:

Buy One September $19 Put Option for less than $1.06

Here is the payoff tabe: 

Trade Buy 1 September $19.00 Put at $1.06 For a net debit of $1.06 Profit/Loss Analysis Breakeven at $17.94 Maximum profit is unbounded Maximum loss is ($106.00) at strike of $19.00 Closing Summary Sold 1 September $19.00 Put at $1.41

Position closed on 8/27/2013 at price of $1.41 with a 33.02% gain in 14 days.

Updates

8/27/2013 12:34:16 PM

We are playing it safe, and are closing the DHI trade. DHI may be forming a double bottom around the $17.80-17.95 range. 

Back to Portfolio