Mike Khouw Sees Unusual Options Activity In Chewy

Mike Khouw spoke on CNBC's "Options Action" about unusually high options activity in Chewy Inc CHWY. The company is going to report earnings on Tuesday and the options market is implying a move of 13% in either direction.

There was a high call option activity on Monday and Khouw noticed that calls outpaced puts by 3 to 1. A trader bought 1,230 contracts of the June 12 expiration, $50 strike calls in Chewy. They were trading for $3.20, which sets the breakeven for the trade at $53.20 or around 9% above the closing price on Monday.