Toll Brothers, Inc (TOL) is a homebuilder who designs and builds homes in residential communities. The company’s stock is currently trading at $36.75 in a 52 week range of $26.64-$39.25. The stock underperformed the market last year as shares only rallied 1.63% over the past 12 months. However, options action TOL in today’s trading session suggests that traders believe the stock will rally through September expiration. Earlier in today’s trading session a trader bought 16,000 TOL Sep 37 calls for $3.95. Over 20,000 contracts have now traded on that line and today’s option volume in TOL is now nearly 8 times the average daily option volume in the name. With stock trading well above the Ichimoku Cloud and the future cloud sloping upward we believe that TOL is setting up well for a long position.
Trade: Buying the TOL Sep 37 Calls for $3.95
Risk: $395 per 1 lot
Reward: Unlimited
Breakeven: $40.95