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Mike Khouw Sees Unusual Options Activity In Disney


On CNBC's Options Action, Mike Khouw spoke about unusually high options volume in Walt Disney Co (NYSE: DIS) ahead of earnings. The company is going to report earnings on Tuesday and the options market is implying the move of 3 percent. It usually moves 3.5 percent on average in a day after the event.

During the trading session on Monday, Khouw noticed a purchase of 5,000 contracts of the March 125 calls for $0.08. The trade breaks even at $125.08 or 14.16 percent higher from the current market price. Khouw explained that Disney is trading below its historical price to earnings multiple, so the trader is probably expecting a return to the historical multiple.

Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media


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