Mike Khouw Sees Unusual Options Activity In Facebook

On CNBC's "Options Action," Mike Khouw spoke about an unusual options activity in Facebook, Inc. FB ahead of earnings. The company is going to report earnings on Wednesday and the options market is implying a move of 6.5% in either direction. The stock has moved around 7% on earnings on the longer-term period but in the last four quarters, it moved around 10%.

The largest trade of the session was a purchase of 6,800 contracts of the July 180 puts for $0.50. Ultimately, over 11,000 contracts of the July 180 puts exchanged hands. The trade breaks even at $179.50 or 11.30 percent below the closing price on Tuesday.

See Also: A Historical Look At How Facebook Shares Trade After Earnings

Facebook closed Tuesday's session at 202.36 per share.