Mike Khouw Sees Unusual Options Activity In Walmart

Mike Khouw spoke on CNBC's "Options Action" about unusually high trading activity in Walmart Inc. WMT.

The company is scheduled to report earnings Thursday (Editor's note: The company beat EPS and sales estimates) and the options market is implying a move of 4.2 percent in either direction. There was a lot of call options activity on Wednesday in Walmart, said Khouw. He explained that call options volume was four times the average daily call options volume.

The most active were the May 87 calls. Around 17,000 contracts were traded for $1.40 and they expire on Friday. The breakeven for the trade is at $88.40 or 2.64 percent above the current stock price.