Institutional Sized Put Buying in Homebuilder Stocks (DHI; LEN; XHB)

The stocks are probably going to do a "Marlin-out-of-the-water" last gasp jump in the next 24 hours, that seems to happen when I harp* on a topic.
From optionMONSTER via Yahoo:

Puts target two homebuilders at once

The homebuilder sector is seeing heavy put action today, and one trader may be playing one name off another.

Earlier today we reported some put buying in D.R. Horton on InsideOptions Pro , and since then our systems have detected action in two more homebuilders. A block of 11,901 KB Home May 9 puts sold for the bid price of $0.76. The volume was 3 times the previous open interest.

Shortly after, a block of 8,083 Lennar May 26 puts were bought for $1.11, above the ask price. This too was well above the existing open interest.

This institutional-size interest in homebuilder puts could be a coincidence--but, as frequent readers know well, I don't believe that there are any random coincidences in trading. So both trades could be part of a relative-value strategy, selling the puts in KBH to purchase the LEN contracts. (See our Education section)

Relative-value trades are very popular with hedge funds. The beauty of this type of play is that it can potentially profit regardless of overall market action.

But, if the trader is selling DHI puts he might want to rethink. From InsiderMonkey:
Why Are Insiders Dumping D.R. Horton $DHI?

...Insiders are investors who have a significant stake in a company, either through employment or individual investment.  In DHI’s case, most are high-level board members and other officers within the firm’s corporate structure, and a large number are dumping their shares.  In the last 6 months, there have been no ‘insider purchases’ of DHI, though there have been sales by officers like Stacey Dwyer, W. Michael Hewatt, S. Bradley Anderson, W. Bill Wheat, and J. Donald Tomnitz.  Remarkably, these constitute almost half of DHI’s top brass, and one of the only names not involved is Donald R. Horton himself.  Another thing to note is that Hewatt, a Director, has reduced his holdings of DHI entirely.  While this could mean early retirement, it is worth noting that no such plans have been formally announced...MORE

Late yesterday What's Trading noted:
Ryland Group Inc (RYL) $18.68 -3.11%

Ryland Group (RYL) loses 49 cents to $18.79 and an Apr – May 18 put spread is bought on the homebuilder for 54 cents, 12000X....MORE

That might just be a hedge, but if not it's a $648,000 bet in a wasting asset.

*See: "AIG Back Into Mortgages = A Top For the Homebuilders (XHB; ITB)"