Mike Khouw Sees Unusual Options Activity In Lyft

On CNBC's "Options Action," Mike Khouw spoke about high options activity in Lyft, Inc. LYFT ahead of earnings.

He noticed on Tuesday, in the morning session, some bullish activity, but as the day progressed the sentiment turned bearish because of the news from California.

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Puts outnumbered calls two to one on Tuesday and the most active were the May 8, $26 strike puts, with over 4,000 contracts traded. Traders paid $1.15 for them, which sets the break even at $24.85 or 6.86% below the closing price on Tuesday.

The company reports earnings on Wednesday and the options market is implying a move of 12.5% in either direction. The move is inline with the stock's average move on earnings.