Mike Khouw Sees Unusual Options Activity In Applied Materials

On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in Applied Materials, Inc. AMAT on Wednesday.

The company is going to report earnings on Thursday and the options market is implying a move of 4.6% in either direction, which is inline with the average move of 4.1%. The options volume on Wednesday was higher than the daily average and calls outnumbered puts by more than 2 to 1, said Khouw.

During the session on Wednesday, Khouw noticed a purchase of August 14, $65/$67 call spread for $1. With the trade, traders are risking a dollar to potentially make a dollar, explained Khouw.