DR Horton, (DHI) Surprise, you couldn't play this stock with the options we have on this position. We hold 25 contracts on the Jan $40 strike for an average cost of .45, take your profit now on the Jan $40 calls, there was very little volume on the new high, only small players playing this tired stock. The Jan $40 call are going for $1.8 or more, depending on Thurs opening price above $2.00 or not, take your profits. If you still have the Feb. calls and puts, continue to hold the puts. Think about selling the Feb $45 calls if the stock runs up to $43 by Friday. This is a highly leverage position with 25 contracts, so ever 1 dollar move in the stock price will give you a $2500 move in option profits. Be careful not to let this slip through your fingers.

D.R. Horton, (DHI) total cost of Jan straddle= $1998, Jan 40 calls, 25 contracts, Jan $26.63 puts 25 contracts. The Jan $40 calls hit $1.00 on Dec 13^th and 14^th, could have closed these out for $2500. Holding on to the Jan. puts for a free ride to the down side. Current price on Jan $40 calls are at $.35 cents, if close out the calls at that price $875. If you have a level 2 account status and would like to use margin, you could write the Jan $35 calls for $2.50, for a credit spread. If D.R. Horton stays below $35 at expiration day, the premium is all yours to keep. The stock's price will have support at $34 red signal line, and open option interest at $30 strike price on the calls. This stock is in the option dead zone time, only 3 weeks left to be profitable on both side of the straddle, the stock price has to move higher to $40 or lower than $26.

The second position on D.R. Horton is using Feb 22.5 puts and Feb $40 calls, 15 contracts each. You have sold calls on earnings pop on Dec 13^th and 14^th for $1.50 to 1.75 to recover cost of options straddle. Puts would be free, and your $2114 would be back into your account. I think the next Fed rate hike will impact housing and in Jan, this combined with energy spikes will knock the home builders down to 52 week lows. My thoughts on the housing market boom or bust. If not, you had a free ride on the puts.

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