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KBH Spread Close Out

HAVING TROUBLE PRINTING?
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EXIT of KHB spread position


Homebuilders' shares were rattled Friday after a strong employment report for July suggested interest rates may be going still higher.

The Dow Jones U.S. Home Construction index was lower by 5.5%, reflecting the pressure on individual names in the sector.

KBH was under a extreme selling pressure and broke through support because of this pressure along with the threat of rising interests rates, tied with the lower U.S home construction index.

This selling pressure along with rumors of an impending housing bubble
forced us to be stopped out of our KBH spread position for a net debit of $0.85 and a NET LOSS of $0.45

Original position
SELL KBH-TO KBH August 75 PUT
BUY KBH-TN KBH August 70 PUT

Exit Strategy= If NET DEBIT = $0.85 STOP


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