Remember those XHB call buys 2 weeks ago? They could be onto something..

According to Forbes the Senate voted 85-2 yesterday moving the bill to a final vote sometimes next week. What does that mean for the XHB(home builders ETF) and those calls?(my previous article) Answer: They have a higher probability of finishing in the money if the extension is granted sometime next week, as OPEX for NOV is closing in(3rd Friday of every month). Contrary to what you may think I am not bullish on the long term trend of the industry. The industry still has substaintial roadblocks ahead before they can even think of winking at recovery, thus I believe the credit extension is good for a short term spike in the shares of TOL, LEN and the likes.




further thoughts on the call buying:
The housing industry, specifically home builders are, are in a world of crap. IF the call buys were in further out months with some out of the money calls being sold i would be a bit more bullish on the recovery. Until I see actual signs of recovery i wont make any bets like these unless they are intra day scalps or 1 -5 day directional bets using options as leverage.