Homebuilders See Protective Option Positioning - Susquehanna

Susquehanna options strategist Alison Edwards notes protective option positioning in August for homebuilders.

For homebuilder ETF ITB, she notes: "An opening investor in the iShares US Home Construction ETF bought 2500 Aug 55 (.32d) puts for $1.85. This investor breaks even on an ~8% decline through mid-August. 81% of the ETF (by market cap) will report between now and 8/19, when the August options expire."

On KBH, she notes: "An opening investor in KB Home bought 10k Aug 25/29 put spreads for $0.90, untied. This investor opens capped downside exposure/protection, breaking even on a 9% decline in the underlying. While earnings is not expected until September, the July/August window has been a seasonally weak period and has been the worst two months for performance going back 25 years."

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