Mike Khouw Sees Unusual Options Activity In Apple

Mike Khouw spoke on CNBC's "Options Action" about unusually high options activity in Apple Inc. (NASDAQ: AAPL) ahead of earnings. The company is going to report on Tuesday after the market closes.

The stock typically moves about 6% on average the week that it reports and right now the options market is implying a move of about 4.3%. A smaller than the average implied move usually implies some level of complacency by the options market, said Khouw.

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The put-call ratio in Apple on Monday was two to one in favor of puts. Khouw explained that this is uncommon for Apple. One trade caught his attention. There was a purchase of 4,000 contracts of the August $195 puts for $1.50. The trade breaks even at $193.50 or 7.72% below the current stock price.

Apple's stock closed Monday at $209.68 per share.