How Toll Brothers Stock May Perform After Earnings Release

Toll Brothers Inc TOL is scheduled to report quarterly earnings on Tuesday after the closing bell. The Street expectations are for earnings of $1.54 per share on revenues of $2.05 billion.

On CNBC's "Options Action," Mike Khouw of Optimize Advisors said the stock traded 2.5 times its average daily call volume on Monday. The market is implying a move of about 7.5%, significantly higher than the average of 4% over the last eight quarters, he added.

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There were buyers of 535 of the July 50 call at $2.25 per contract on average, Khouw mentioned. Traders see shares of Toll Brothers rising by by at least 12% by July expiration, he added.

TOL Price Action: Shares of Toll Brothers declined by nearly 2% to settle at $46.73 on Monday.

Posted In: CNBCMike KhouwOptimize AdvisorsLong IdeasMediaTrading Ideas