On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in Facebook, Inc. FB ahead of earnings.
The company is going to report earnings on Wednesday and the options market is implying a move of 6.6% in each direction, which is less than the 7.7% move, averaged over the last eight quarters.
Khouw noticed during the session on Tuesday a purchase of 4,600 contracts of the May 1, $170 puts for $1.20. The trade breaks even at $168.80 or around 7.7% below the closing price on Tuesday.
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