Mike Khouw Sees Unusual Options Activity In PayPal

On CNBC's "Options Action", Mike Khouw spoke about unusually high options activity in Paypal Holdings Inc PYPL, ahead of earnings. The options market is implying a 4 percent move in either direction on the event and call options volume ran two times the average daily call options volume.

Around 2,700 contracts of the January 75 calls were traded during the session Wednesday. Traders paid $1.05 for them, which sets the break even for the trade at $76.05 or 13.07 percent above the closing price on Wednesday. Khouw believes the options premium is relatively low compared to how much the stock has been moving.