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Mike Khouw Sees Unusual Options Activity In The Goodyear Tire & Rubber Company

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CNBC Options Action's Mike Khouw said on the show that he noticed unusually high call options trading volume in The Goodyear Tire & Rubber Company (NASDAQ: GT) on Tuesday. More than 6 times daily average call options volume was traded and the options market is implying a 7 percent move on earnings.

Traders were buying heavily the January 23 call options for $1, which sets the breakeven for this trade at $24. The Goodyear Tire & Rubber Company closed the session at $21.91 with an increase in price of 6.31 percent and for the trade to be profitable the stock has to jump additional 9.5 percent.

Khouw added that crude oil makes around two-thirds of the company's raw materials so lower oil prices could be a big positive for The Goodyear Tire & Rubber Company.

 

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