Mike Khouw Sees Unusual Options Activity In UPS

On CNBC's Options Action, Mike Khouw spoke about unusually high options activity in United Parcel Service, Inc. UPS. The call options volume on Monday, a day before the earnings release, was more than two times higher than the average daily call options volume.

The stock is moving around 2 percent on average on earnings and that is what the options market is implying right now. The most active options on Monday were the October weekly 105-strike calls, which traded for $2.85. The breakeven for the trade is at $107.85 or 1.5 percent higher from Monday's closing price and the stock has to move above that price by Friday expiration.