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Investors boost call volume in Ryland for two straight days looking for further downside.
Karla hosts and produces Options News and Mad About Options, and writes the Sidewinder report. Karla graduated from Colgate University, where she majored in English and Film and Media Studies. November 20, 2009 1:02 EST Related Symbols: RYL
Call selling in homebuilder name Ryland Group Inc. (RYL) has hit the tape for a second straight day, and it looks like an investor is expressing even more bearishness that we saw on Thursday.
At 11:34 a.m. EST, an investor traded 10,000 December 19 calls for around $1.10 (the bid price). These calls have dropped 50 cents, and they have a 53-delta. RYL shares were down 62 cents at the time of the trade, which means the calls are down more than the delta would suggest. The investor most likely traded this block to open, as the December 19 calls are currently home to open interest of just 261 contracts.
The company did not announce any notable news this week, but disappointing housing starts and mortgage reports have kept homebuilding stocks in the red. RYL shares are currently trading down 4.3% to $18.77, and investors could be selling calls expecting limited upside in the already declining stock.
Heavy call selling does not mean investors should run out and sell RYL shares. But it is interesting that investors continue to anticipate further downside in RYL shares throughout the next month ahead of the company’s expected earnings report due sometime at the end of January.
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