Mike Khouw Sees Unusual Options Activity In Estee Lauder

Mike Khouw said on CNBC's Options Action that there was a a big put options volume in Estee Lauder Companies Inc EL on Thursday. Options volume reached 10 times its average daily volume and put options volume reached 13.5 times its average daily volume. Investors were buying the August 72.5 puts and they paid a premium of $0.65. This means that they are expecting Estee Lauder to trade below $71.85 by the end of Friday. The company is due to report earnings on Friday and the stock is trading close to its all time highs. The investors must be thinking that the earnings might not be good enough to justify current price level of $75.90 and that the stock could be trading more than 5% lower on Friday.