Mike Khouw Sees Unusual Options Activity In Apple

Mike Khouw spoke on CNBC's "Options Action" about unusually high options activity in Apple Inc. 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.