Carter Worth And Mike Khouw's UPS Options Trade

On CNBC's "Options Action", Carter Worth spoke about United Parcel Service, Inc. UPS.

He said the stock has been underperforming the rest of the market and he thinks it could catch up with the market. Worth added it's trading near its 2016 high and he thinks it's going to break out on the upside. Worth wants to buy the stock going into earnings report, which is scheduled for Thursday.

Mike Khouw suggested options traders should exploit low volatility and buy the January 120 calls for $3.20. He picked the January expiration because the stock doesn't move that much on earnings, only 2 percent. It moves more during the holiday season. The trade breaks even at $123.20 or 2.67 percent higher.