Long Idea: LEN (A November Bull Call Spread)

A large bull call spread was placed on LEN today. The trader purchased 10,000 of 15 Nov’19 calls at the $60 strike and sold the same number of calls at the higher $65 strike betting $620K on a continued rise of the stock. If he is correct, the initial bet will turn into $4.4m (or 700% return).

LEN: Time and Sales

This spread trade was executed by a broker in two blocks (9700 and 300) at 9:10am PST.

LEN: Option Chain

The open interest on both strikes were way lower than the volume, which implies that this was a new bull call spread placed today.

LEN: Weekly Chart

The price is breaking out from the prior resistance levels. The trader is hoping that this break out will lead to a significant follow through, just as it happened back in October 2017.

Risk Reward of the Trade

The trader committed $620K to this trade. If LEN lands above $65 by expiration in November, the trader will grow his initial bet into $4.4m (or 700%).

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