Mike Khouw Sees Unusual Options Activity In Shake Shack

On CNBC's "Options Action," Mike Khouw spoke about options activity in Shake Shack Inc SHAK ahead of its earnings report, scheduled for the next week.

Khouw said the options market is implying a move of 12.5% higher or lower by the end of the next week. He added that people who were looking at options on Thursday might have noted that there was a lot of puts trading, but some of that was just adjusting already open positions.

The most opening activity was in the May $56 calls and over 1,400 contracts were traded by the end of the day, said Khouw. Buyers of these calls were paying around $4 for them, which sets the break even for the trade at $60 or around 10% above the closing price on Thursday.