Mike Khouw Sees Unusual Options Activity In Tesla

On CNBC's Options Action, Mike Khouw spoke about Tesla Inc TSLA ahead of earnings. The company is going to report earnings on Wednesday and the options market is implying a 6 percent move in either direction for the event. Over the last four quarters, Tesla moved around 5 percent on average.

Khouw said he noticed big options activity in the February 24, 300 strike calls. Traders were paying $2.20 for them, which sets the break even for the trade at $302.20 or 8.94 percent higher.