Mike Khouw Sees Unusual Options Activity In D.R. Horton

On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in D. R. Horton Inc DHI. He said the call options volume on Wednesday was two times the average daily call volume and the reason for that activity was a large purchase of the May 44 calls.

A trader bought 4,000 contracts of the May 44 calls for $1.81, which sets the breakeven for the trade at $45.81 or 4.28 percent above the closing price on Wednesday. Khouw explained that this is a roll of a previous bullish trade in the May 39 calls. The trader sold to close 2,300 contracts of the May 39 calls and almost doubled the position with the new purchase.