On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in Roku Inc ROKU ahead of earnings. The company is going to report earnings on Wednesday and the options market is implying a move of 8.4% in either direction. It moves 8.2% on earnings, on average.
Calls outpaced puts on Tuesday and during the session, Khouw noticed a purchase of 800 contracts of the September $420/$440 call spread for $8. The trade breaks even at $428 or 2.44% above the closing price on Tuesday. It can make a maximal profit of $12.
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