Options traders are feeling bullish on KB Home ahead of Wednesday's earnings report

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KB Home kicks off the latest round of homebuilder earnings when it reports after the bell Wednesday, and options traders see more gains ahead.

) ahead of upcoming earnings announcements that we believe will reveal decidedly improved housing fundamentals and potential upside to current consensus FY20 estimates," wrote Raymond James in a note that came out early Wednesday morning., which is up a respectable 33% in 2019, and the options market thinks that outperformance will continue long after Wednesday's report.

"Where we saw the most activity was the October 32 calls. Those were trading for about $1.15. Any buyers of those calls are obviously betting [KB Home] is going above that $32 strike price by at least the $1.15 they paid," Optimize Advisors President Michael Khouw said Tuesday on "Put another way, these traders are betting on a jump of at least 6% in KB Home between Tuesday's close and October expiration.

While Toll Brothers won't report earnings until December, Lennar follows up KB Home's report on Oct. 2, and Toll Brothers will likely piggy back off of any results that show fundamental improvement in the space.

 

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