LEN – Lennar Corporation – Shares in U.S. homebuilder Lennar Corp. are rallying on Wednesday after the company reported fourth-quarter earnings that handily beat the average of analyst estimates. The stock increased as much as 5.0% at the start of the session to $36.97, the highest level since the end of October, but are currently well off their highs to trade up 1.4% on the day at $35.69 as of 11:15 a.m. EST.
Trading in Lennar call options initiated within the first 10 minutes of the trading day suggests one strategist is positioning for the price of Lennar’s shares to rally to the highest level since May during the next couple of months. It looks like the trader purchased around 2,000 of the Feb ’14 $39 strike calls this morning at a premium of $1.10 each. The position may be profitable at expiration next year if shares in the homebuilder rally 12% over the current price of $35.69 to exceed the effective breakeven point at $40.10.
