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Options Action Expects 16% Downside For Homebuilders, But Analyst Says Buy The Dip

On CNBC’s “Options Action,” Michael Khouw of Optimize Advisors said that SPDR S&P Homebuilders ETF XHB traded more than 2 times its average daily put volume on Tuesday. Meanwhile, a Keybanc analyst is advising investors to buy the dip in homebuilder stocks.

Check out other stocks making moves in the premarket.

There were buyers of 3,056 of the November 49 puts at an average price of 89 cents per contract, Khouw mentioned. Traders expect SPDR S&P Homebuilders ETF RH to decline by at least 16% over by November expiration, he added.

Also Read: Analyst Remains Bearish On Real Estate iBuyers: ‘Fundamentals Are Going To Turn Worse Before They Get Better’

“As rates have gone higher, so has the interest in puts on XHB, which has more than quintupled since late March,” Khouw stated.

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