Mike Khouw Sees Unusual Options Activity In Best Buy

On CNBC's "Options Action", Mike Khouw said the options volume in Best Buy Co Inc BBY on Wednesday was four times its average daily options volume. The company reports earnings on Thursday and the options market is implying a move of 9 percent in either direction. The stock normally moves around 6 percent on the event.

Khouw noticed that options traders were buying the weekly 67 puts early in the trading session. Later in the day, there was a purchase of 4,000 contracts of the March 65/62.50 put spread, which is a bet that the stock might drop even more than its implied move.