On January 13, I recommended a buy on the Lennar (LEN) May 45 put and the Pulte Group (PHM) April 21 put because the bulls sent builders up too much too soon on nothing more than hope. As usual, though, the bulls weren’t paying attention.
There is no recovery in housing.
Today, shares of LEN are down $2.65 on the day, bringing our put option to $4.10 x $4.45. While I don’t believe the fall is over for the stock, I am recommending that you sell to close half to secure gains.
Shares of PHM are down more than a dollar on the day, as well, bringing our put option to $1.30 x $1.35. Consider selling to close half of the trade here, too.
Congratulations on the quick gains.
We’ll have more shortly.
Ian L. Cooper
Inside Value Trader