RH options trading spike on housing market concerns

What happened: RH, a luxury furniture retailer, saw a spike in options trading on May 18th, following warnings from its CEO, Gary Friedman, about the "most dire" housing market he's seen in his 40-year career. Mortgage applications tumbled 10.4% the same week due to rising rates, marking the first annual decline in over a year.

Market impact: The housing market slowdown is driving concerns about consumer spending, as high mortgage rates make home purchases less affordable. This impacts retailers like RH, which cater to high-end consumers. The options trading spike suggests investors anticipate further volatility in RH's stock due to these headwinds.

What to watch next: On May 25th, RH reports its Q1 earnings, which will provide insights into how the housing market slowdown is affecting its sales. Additionally, the MBA Mortgage Applications Index on May 25th and June 1st will offer updates on mortgage demand and housing market health.