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.

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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.

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